~~U.S.~~UNITED ~~SECURITIES~~STATES ~~AND EXCHANGE COMMISSION~~

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ~~AND~~ EXCHANGE ACT OF 1934

For the quarterly period ended June 30, ~~2004~~2009

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ~~AND~~ EXCHANGE ACT OF 1934

For the transition period from to

COMMISSION FILE NUMBER ~~333~~001-~~88168-01~~32432 ~~333-88168~~

~~SYNIVERSE~~ 333-88168 ~~HOLDINGS, LLC~~

SYNIVERSE HOLDINGS, INC.

SYNIVERSE TECHNOLOGIES, INC.

(Exact name of registrant as specified in its charter)

Delaware		30-~~0041664~~0041666
Delaware		06-1262301
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

~~(State~~8125 orHighwoods ~~other jurisdiction~~Palm ofWay ~~incorporation or organization) (I.R.S. Employer Identification No.)~~

~~201 N. Franklin Street~~Tampa, ~~Suite~~Florida ~~700~~33647

Tampa, Fl 33602

(Address of principal executive office)

(Zip code)

(813) ~~273~~637-~~3000~~5000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulations S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x¨ No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, ~~(as~~a ~~defined~~non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act).

~~Yes ¨ No~~ Large accelerated filer x Accelerated filer ¨ Non-accelerated filer ¨ Smaller reporting company ¨

AsIndicate ofby ~~August~~check ~~12,~~mark ~~2004,~~whether ~~there~~the ~~were~~registrant ~~2,000~~is ~~shares~~a ofshell ~~Syniverse~~company ~~Technologies,~~(as ~~Inc.’s~~defined noin ~~par~~Rule ~~value~~12b-2 ~~common~~of ~~stock outstanding, which are owned~~the ofExchange ~~record by Syniverse Holdings, Inc~~Act.~~, a company that is owned by Syniverse Holdings, LLC~~). Yes ¨ No x

Indicate the number of shares outstanding of each of the issuer’s classes of Common Stock, as of the latest practicable date.

Shares Outstanding as of August 5, 2009

Syniverse Holdings, Inc.: 68,757,763 shares of common stock, $0.001 par value

Syniverse Technologies, Inc.: 2,000 shares of common stock, no par value,

all of which are owned by Syniverse Holdings, Inc.

TABLE OF CONTENTS

		Page
PART I:	FINANCIAL INFORMATION
ITEM 1:	~~Condensed Consolidated~~ Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2004 (unaudited) and December 31, 2003	3
	Condensed Consolidated Balance Sheets as of June 30, 2009 (Unaudited) and December 31, 2008	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2004 (unaudited) and the three and six months ended June 30, 2003 (unaudited)	4
	Condensed Consolidated Statements of Income (Unaudited) for the three and six months ended June 30, 2009 and 2008	4
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2004 (unaudited) and the six months ended June 30, 2003 (unaudited)	5
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the six months ended June 30, 2009 and 2008	5
	Notes to Condensed Consolidated Financial Statements – June 30, 2004 (unaudited)	6
	Notes to Condensed Unaudited Consolidated Financial Statements	6
ITEM 2:	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1924
ITEM 3:	Quantitative and Qualitative Disclosures ~~about~~About Market Risk	2936
ITEM 4:	Controls and Procedures	3036
PART II:	OTHER INFORMATION	31
ITEM 1:	Legal Proceedings	3137
ITEM 2:	Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities	31
ITEM 1A:	Risk Factors	37
ITEM 3:	Defaults Upon Senior Securities	31
ITEM 2:	Unregistered Sales of Equity Securities and Use of Proceeds	37
ITEM 4:	Submission of Matters to a Vote of Security Holders	31
ITEM 3:	Defaults Upon Senior Securities	37
ITEM 5:	Other Information	31
ITEM 4:	Submission of Matters to a Vote of Security Holders	37
ITEM 6:	Exhibits and Reports on Form 8-K	32
ITEM 5:	Other Information	38
SIGNATURES		33
ITEM 6:	Exhibits	38
EXHIBIT INDEX		E-1
SIGNATURES		39
EXHIBIT INDEX		40

PART 1

FINANCIAL INFORMATION

ITEM 1. ~~CONDENSED CONSOLIDATED~~ FINANCIAL STATEMENTS ~~SYNIVERSE HOLDINGS, LLC CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS)~~

	June 30,2004(unaudited)			December 31,2003
ASSETS
Current assets:
Cash	$	11,158		$	8,299
Accounts receivable, net of allowances of $1,283 and $2,535, respectively		72,786			61,611
Deferred tax assets		369			369
Prepaid and other current assets		6,176			6,284
Total current assets		90,489			76,563
Property and equipment, net		37,702			33,548
Capitalized software, net		63,687			67,653
Deferred costs, net		13,108			14,584
Goodwill		331,359			331,263
Identifiable intangibles, net:
Customer contract, net		7,459			9,705
Trademark		—			685
Customer base, net		190,843			196,270
Total assets	$	734,647		$	730,271
LIABILITIES AND UNITHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	6,850		$	4,029
Accrued payroll and related benefits		6,871			8,881
Accrued interest		13,859			14,136
Other accrued liabilities		22,970			17,419
Current portion of Term B Loan, net of discount		35,835			33,589
Total current liabilities		86,385			78,054
Long-term liabilities:
Deferred taxes		23,871			19,700
Subordinated Notes, net of discount		241,427			241,037
Term B Loan, net of discount		154,375			174,749
Other long-term liabilities		2,975			2,955
Total long-term liabilities		422,648			438,441
Unitholders’ equity:
Class A Preferred Units-an unlimited number authorized, none issued or outstanding		—			—
Class B Preferred Units-an unlimited number authorized, 252,367.50 units issued and outstanding at June 30, 2004 and December 31, 2003; liquidation preference of $252,367		252,367			252,367
Common Units-an unlimited number authorized, 90,640,541 and 90,505,405 units issued and outstanding at June 30, 2004 and December 31, 2003, respectively		120,355			120,351
Accumulated deficit		(147,537	)		(159,368	)
Accumulated other comprehensive income		429			426
Total unitholders’ equity		225,614			213,776
Total liabilities and unitholders’ equity	$	734,647		$	730,271

SYNIVERSE HOLDINGS, INC.

~~See~~CONDENSED ~~Notes~~CONSOLIDATED toBALANCE ~~Condensed Consolidated~~SHEETS ~~Financial Statements~~

(AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)


	June 30, 2009			December 31, 2008
	(Unaudited)
ASSETS
Current assets:
Cash	$	187,846		$	165,605
Accounts receivable, net of allowances of $4,018 and $2,347, respectively		86,005			88,782
Prepaid and other current assets		30,626			20,971

Total current assets		304,477			275,358

Property and equipment, net		54,749			50,251
Capitalized software, net		59,752			60,184
Deferred costs, net		8,255			7,288
Goodwill		601,588			596,662
Identifiable intangibles, net		199,508			208,518
Other assets		1,701			1,573

Total assets	$	1,230,030		$	1,199,834

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	12,049		$	7,311
Accrued payroll and related benefits		7,275			20,111
Accrued interest		5,177			5,160
Accrued income taxes		2,168			9,891
Deferred revenues		3,916			4,260
Other accrued liabilities		27,552			28,975
Current portion of Term Note B		3,427			3,431

Total current liabilities		61,564			79,139

Long-term liabilities:
Deferred tax liabilities		73,625			65,546
7³/4% senior subordinated notes due 2013		175,000			175,000
Term Note B, less current maturities		333,237			335,382
Other long-term liabilities		10,089			8,925

Total liabilities		653,515			663,992

Stockholders’ equity:
Preferred stock, $0.001 par value; 300,000 shares authorized; no shares issued		—			—
Common stock, $0.001 par value; 100,300,000 shares authorized; 68,930,279 shares issued and 68,738,281 shares outstanding and 68,847,632 shares issued and 68,455,634 shares outstanding at June 30, 2009 and December 31, 2008, respectively		68			68
Additional paid-in capital		474,768			471,524
Retained earnings		115,878			83,315
Accumulated other comprehensive loss		(15,173	)		(19,035	)
Common stock held in treasury, at cost; 191,998 and 391,998 at June 30, 2009 and December 31, 2008, respectively.		(15	)		(30	)

Total Syniverse Holdings, Inc. stockholders’ equity		575,526			535,842
Noncontrolling interest		989			—

Total equity		576,515			535,842

Total liabilities and equity	$	1,230,030		$	1,199,834

See Notes to Condensed Unaudited Consolidated Financial Statements

SYNIVERSE HOLDINGS, ~~LLC~~INC.

CONDENSED CONSOLIDATED STATEMENTS OF ~~OPERATIONS~~INCOME (UNAUDITED)

(~~DOLLARS~~AMOUNTS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)

	Three Months EndedJune 30,						Six Months ~~Ended~~EndedJune ~~June~~ 30,
	2004(unaudited)			2003(unaudited)			2004(unaudited)			2003(unaudited)
	2009			2008			2009			2008
Revenues	$	84113,~~941~~478		$	67127,~~476~~619		$	~~161~~222,~~611~~402		$	~~131~~243,~~788~~264
Costs and expenses:
Cost of operations		36,271			26,637			71,426			53,280
Cost of operations (excluding depreciation and amortization shown separately below)		40,904			41,589			80,862			79,567
Sales and marketing		58,~~169~~835			412,~~527~~200			1017,~~444~~523			922,~~652~~954
General and administrative		817,~~904~~005			919,~~763~~868			1734,~~525~~003			1838,~~819~~010
Provision for (recovery of) uncollectible accounts		(257	)		387			(9	)		756
Depreciation and amortization		14,037			13,791			27,621			27,424
Depreciation and amortization		9,891			9,279			20,181			18,269
Restructuring		—			—			—			17
Restructuring		289			—			289			1,841
		80,781			87,448			160,009			167,972
		60,267			50,593			119,856			102,617
Operating income		32,697			40,171			62,393			75,292
Operating income		24,674			16,883			41,755			29,171
Other income (expense), net:
Interest income		~~427~~49			~~121~~482			~~598~~241			~~389~~912
Interest expense		(127,~~393~~495	)		(139,~~898~~407	)		(2614,~~324~~851	)		(3119,~~092~~127	)
Other, net		—851			—(272	)		(61,134	)		—(215	)
		(11,966	)		(13,777	)		(25,732	)		(30,703	)
		(6,595	)		(9,197	)		(13,476	)		(18,430	)
Income (loss) before provision for income taxes		12,708			3,106			16,023			(1,532	)
Income before provision for income taxes		26,102			30,974			48,917			56,862
Provision for income taxes		29,~~088~~624			110,~~819~~622			416,~~192~~407			~~360~~21,117
Net income (loss)		10,620			1,287			11,831			(1,892	)
Net income		16,478			20,352			32,510			35,745
Preferred unit dividends		(7,788	)		(7,056	)		(15,386	)		(13,938	)
Less: Net loss attributable to noncontrolling interest		(53	)		—			(53	)		—
Net income (loss) attributable to common unitholders	$	2,832		$	(5,769	)	$	(3,555	)	$	(15,830	)
Net income attributable to Syniverse Holdings, Inc.	$	16,531		$	20,352		$	32,563		$	35,745
Net income per common share:
Basic	$	0.24		$	0.30		$	0.47		$	0.53
Diluted	$	0.24		$	0.30		$	0.47		$	0.52
Weighted average common shares outstanding:
Basic		67,945			67,619			67,907			67,564
Diluted		68,029			67,740			67,980			67,649

See Notes to Condensed Unaudited Consolidated Financial Statements

SYNIVERSE HOLDINGS, ~~LLC~~INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(~~DOLLARS~~AMOUNTS IN THOUSANDS)

	Six Months Ended June 30,
	Six Months EndedJune 30,
	2004(unaudited)			2003(unaudited)
	2009			2008
Cash flows from operating activities
Net income (loss)	$	11,831		$	(1,892	)
Net income	$	32,510		$	35,745
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization including amortization of deferred debt issuance costs		2528,~~020~~481			2528,~~777~~309
Provision for (recovery of) uncollectible accounts		(9356	)		~~756~~(153	)
Deferred income tax expense		45,~~171~~604			~~795~~13,991
Loss on disposition of property		127			—
Stock-based compensation		3,015			2,424
Changes in operating assets and liabilities:
Other, net		66			18
Accounts receivable		(11,166	)		(1,578	)
Changes in operating assets and liabilities, net of acquisition:
Other current assets		117			945
Accounts receivable		3,320			(13,766	)
Accounts payable		1,407			3,252
Other current assets		(9,626	)		(3,266	)
Other current liabilities		4,618			(3,861	)
Accounts payable, accrued payroll and related benefits		(7,967	)		2,096
Other assets and liabilities		(980	)		1,045
Other current liabilities		(7,946	)		(1,146	)
Net cash provided by operating activities		35,136			25,239
Other assets and liabilities		2,461			(126	)
Net cash provided by operating activities		50,274			64,126
Cash flows from investing activities
Capital expenditures		(1220,~~135~~936	)		(520,~~212~~361	)
Net cash used in investing activities		(12,135	)		(5,212	)
Acquisition of Wireless Solutions International, net of acquired cash		(3,182	)		—
Acquisition of BSG Wireless, net of acquired cash		—			(823	)
Net cash used in investing activities		(24,118	)		(21,184	)
Cash flows from financing activities
Principal payments on long-term debt		(20,100	)		(52,275	)
Principal payments on senior credit facility		(1,705	)		(1,786	)
Issuance of common units		4			13
Issuances of stock under employee stock purchase plan		415			388
Repurchase of common units		—			(9	)
Issuance of stock for stock options exercised		95			1,391
Net cash used in financing activities		(20,096	)		(52,271	)
Minimum tax withholding on restricted stock awards		(266	)		(429	)
Effect of exchange rate changes on cash		(46	)		—
Purchase of treasury stock		—			(1	)
Net increase (decrease) in cash		2,859			(32,244	)
Capital contribution from noncontrolling interest in a joint venture		981			—
Cash at beginning of period		8,299			42,190
Net cash used in financing activities		(480	)		(437	)
Cash at end of period	$	11,158		$	9,946
Effect of exchange rate changes on cash		(3,435	)		1,184
Net increase in cash		22,241			43,689
Cash at beginning of period		165,605			49,086
Cash at end of period	$	187,846		$	92,775
Supplemental cash flow information
Interest paid	$	2113,~~829~~327		$	2315,~~816~~180
Income taxes paid		—21,768			946,367

See Notes to Condensed Unaudited Consolidated Financial Statements

SYNIVERSE HOLDINGS, ~~LLC~~INC.

NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS ~~(UNAUDITED)~~

(~~DOLLARS~~AMOUNTS IN THOUSANDS EXCEPT SHARE AND PER SHARE ~~DATA~~AMOUNTS)

1. ~~Basis~~Business ~~of Presentation and Principles of Consolidation~~

~~The~~We ~~accompanying~~are ~~condensed~~a ~~consolidated~~leading ~~financial~~enabler ~~statements~~ of ~~Syniverse~~wireless ~~Holdings,~~voice ~~LLC~~and ~~(the~~data ~~Ultimate~~services ~~Parent~~for ortelecommunications ~~Syniverse~~companies ~~LLC)~~worldwide. ~~have~~We ~~been~~were ~~prepared~~incorporated in Delaware on ~~accordance~~November 9, ~~with~~2001 ~~accounting~~and ~~principles~~completed ~~generally~~our ~~accepted~~initial inpublic ~~the~~offering ~~United~~on ~~States~~February 10, ~~for~~2005. ~~interim~~For ~~financial~~over ~~information.~~20 ~~Accordingly~~years, ~~they~~including doour ~~not~~time ~~include~~as ~~all~~part of ~~the~~our ~~information~~former ~~and~~parent ~~footnotes~~company, ~~required~~we byhave ~~generally~~served ~~accepted~~as ~~accounting~~one ~~principles~~of ~~for~~the ~~complete financial~~wireless ~~statements.~~industry’s Inoperator-neutral intermediaries, solving the ~~opinion~~challenges ofthat ~~management~~arise as new technologies, ~~all~~standards ~~adjustments~~and ~~(including~~protocols ~~normal~~emerge. ~~recurring~~Our ~~accruals)~~data ~~considered~~clearinghouse, ~~necessary~~network and technology services solve technical and operational challenges for athe ~~fair~~wireless ~~presentation~~industry ~~have~~by ~~been~~translating incompatible ~~included~~communication standards and protocols and simplifying operator interconnectivity. ~~Operating~~Our ~~results~~suite ~~for~~of ~~the~~transaction-based ~~six~~services ~~months~~allows ~~ended~~operators ~~June~~to 30deliver seamless voice, ~~2004~~data ~~are~~and ~~not~~next ~~necessarily~~generation services to wireless subscribers, including ~~indicative~~wireless ofvoice ~~the~~and ~~results~~data ~~that~~roaming, ~~may~~Short beMessage ~~expected~~Service ~~for~~(SMS), ~~the~~Multimedia ~~year~~Messaging ~~ended~~Services ~~December~~(MMS), 31Mobile Instant Messaging (MIM), ~~2004~~number portability and wireless value-added services. We currently provide our services to more than 650 operators in over 140 countries.

The condensed consolidated financial statements include the accounts of Syniverse Holdings, LLC, Syniverse Holdings, Inc. (Syniverse Inc.), Syniverse Technologies, Inc. (Syniverse), Syniverse Finance, Inc. (Syniverse Finance), Syniverse Networks, Inc. (Syniverse Networks), Syniverse Technologies, BV (Syniverse BV), for periods beginning on and after February 14, 2002, Syniverse Brience, LLC (Syniverse Brience) and Syniverse Holdings Limited (Syniverse Holdings). References to “the Company”, “us”, or “we” include all of the consolidated companies. All significant intercompany balances and transactions have been eliminated.

In July 2003, Syniverse LLC acquired Brience, Inc. (Brience) by merging Brience with and into Syniverse Brience, LLC (Syniverse Brience). At the time of the Brience merger, funds associated with GTCR Golder Rauner, LLC had a controlling interest in both Brience and Syniverse LLC. Due to common control of both Syniverse LLC and Brience since February 14, 2002 by funds associated with GTCR, the acquisition was accounted for in a manner similar to a pooling of interests. Therefore, all historical financial statements of Syniverse LLC since February 14, 2002 include Brience’s historical financial results.

Syniverse LLC acquired Syniverse Holdings on December 19, 2003. The acquisition was accounted for using the purchase method of accounting and the results of operations of Syniverse Holdings have been included since December 19, 2003.

2. Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

The accompanying unaudited condensed consolidated financial statements of Syniverse Holdings, Inc. (Syniverse, Inc.) have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments considered necessary for a fair presentation have been included and are of a normal, recurring nature. We have evaluated subsequent events for potential recognition and/or disclosure through August 7, 2009, which is the date the consolidated financial statements included in this Quarterly Report on Form 10-Q were filed with the Securities and Exchange Commission. The unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2008. Operating results for the three and six months ended June 30, 2009 are not necessarily indicative of the results that may be expected for the year ended December 31, 2009.

The unaudited condensed consolidated financial statements include the accounts of Syniverse Holdings, Inc., all of its wholly owned subsidiaries and a variable interest entity (VIE) for which Syniverse, Inc. is deemed to be the primary beneficiary. References to “the Company”, “us”, or “we” include all of the consolidated companies. Noncontrolling interest is recognized for the portion not owned by us of a consolidated joint venture. All significant intercompany balances and transactions have been eliminated.

Revenue Recognition

WeThe ~~derive~~majority of our revenues ~~from~~are ~~five~~transaction-based ~~primary~~charges ~~categories:~~under ~~Network~~long-term ~~Services~~contracts, ~~Number~~typically averaging three years in duration. From time to time, if a contract expires and we have not previously negotiated a new contract or renewal with the customer, we ~~Porting~~continue ~~Services~~to provide services under the terms of the expired contract on a month-to-month billing schedule as we negotiate new agreements or renewals. Our revenues are primarily the result of the sale of our technology interoperability services, network ~~Technology~~services, ~~Interoperability~~number ~~Services~~portability services, ~~Call~~call ~~Processing~~processing ~~Services~~services, enterprise solutions and ~~Other~~off-network ~~Outsourcing~~database ~~Services~~queries to wireless operators throughout the world. ~~The~~Generally, ~~revenue~~there ~~recognition~~is ~~policy~~a ~~for~~seasonal ~~each~~increase in wireless roaming telephone usage and corresponding revenues in the high-travel months of ~~these~~our ~~areas~~second isand asthird ~~follows:~~fiscal quarters.

• ~~Network~~Technology Interoperability Services primarily generate ~~revenue~~revenues by charging per-transaction processing fees. For our wireless roaming clearinghouse, ~~circuit~~SMS ~~fees~~services, ~~and~~MMS ~~port~~services, ~~fees.~~DataNet ~~The~~services, ~~monthly~~interstandard ~~SS7~~roaming ~~connection~~solutions ~~fee~~and isMobile Data Roaming (MDR) services, revenues vary based on the number ofor ~~links~~size asof ~~well~~data/messaging asrecords ~~the~~provided ~~number~~to ofus ~~switches~~by towireless ~~which~~operators afor ~~customer~~aggregation, ~~signals~~translation and isdistribution ~~recognized~~among inoperators. ~~the~~We ~~period~~recognize ~~when~~revenues at the ~~service~~time isthe ~~rendered~~transactions are processed. ~~The~~For ~~per-transaction~~our ~~fees~~financial ~~are~~clearinghouse and settlement services, revenues vary based on the number of ~~subscriber~~invoices ~~events~~or ~~and~~roaming ~~database~~agreements ~~queries~~managed ~~made~~on ~~through~~the ~~our~~customer’s ~~network~~behalf. ~~and~~We ~~are~~recognize ~~recognized as~~ revenues at the time the ~~transactions~~services are performed. ~~Syniverse~~Additionally, ~~Brience’s~~we ~~software~~provide ~~revenues~~solutions ~~are~~with ~~generated~~multiple ~~through~~product ~~license~~and ~~fees,~~service ~~maintenance~~elements ~~agreements~~which ~~and~~may ~~professional~~include ~~services.~~software ~~License~~and ~~fee~~hardware ~~revenues~~products, ~~consist~~as ~~principally~~well ofas ~~revenue~~installation ~~from~~services, ~~the~~post-contract ~~licensing~~customer ofsupport ~~our~~and ~~software~~training. ~~Revenue~~In isthose ~~recognized~~cases, ~~from~~we ~~software~~recognize ~~license~~revenues ~~fees~~in onaccordance awith ~~straight-line~~the ~~basis~~American ~~over~~Institute ~~the~~of ~~period~~Certified ~~beginning~~Public ~~with~~Accountants’ ~~the~~Statement ~~completion~~ of ~~implementation~~Position ~~and~~97-2 ~~customer~~(SOP ~~acceptance~~97-2), ~~and~~Software ~~ending~~Revenue ~~with~~Recognition, ~~conclusion~~as ofamended ~~the~~by ~~first~~SOP ~~maintenance~~98-9, ~~period.~~Modification ~~Maintenance~~of ~~agreements~~SOP ~~call~~97-2, ~~for~~Software usRevenue toRecognition ~~provide~~With ~~technical~~Respect ~~support~~to ~~and~~Certain ~~software~~Transactions. ~~enhancements~~Under toSOP ~~customers.~~97-2, ~~Revenue~~revenue onattributable ~~technical~~to ~~support~~an ~~and~~element ~~software~~in ~~enhancement~~a ~~rights~~customer arrangement is recognized ~~ratably~~when ~~over~~persuasive ~~the~~evidence ~~term~~ of ~~the~~an ~~support~~arrangement ~~agreement.~~exists, ~~Professional~~delivery ~~services~~has ~~include consulting~~occurred, ~~training~~the ~~and~~fee ~~installation~~is ~~services~~fixed toor ~~our~~determinable ~~customers.~~and ~~Revenue~~collectability ~~from such services~~ is ~~generally recognized on a straight-line basis over the same period as the software license fee~~probable.

• ~~Number~~Network ~~Porting~~ Services primarily generate revenues by charging per-transaction processing fees. In addition, ~~monthly~~our ~~fixed~~customers ~~fees,~~pay ~~and~~monthly connection fees ~~for~~based ~~customer~~on ~~implementations.~~the Wenumber ~~defer~~of ~~revenues~~network ~~related~~connections toas ~~customer~~well ~~implementations,~~as ~~and~~the ~~recognize~~number ~~these~~of ~~fees~~switches onwith which a ~~straight~~customer communicates. The per-~~line~~transaction ~~basis~~fees ~~over~~are based on the ~~life~~number of ~~the~~intelligent ~~initial~~network ~~customer~~messages ~~agreements.~~and Weintelligent ~~recognize~~network ~~processing~~database queries made through our network and are recognized as revenues at the time the transactions ~~and services~~ are ~~performed~~processed.

• ~~Technology~~Number ~~Interoperability~~Portability Services primarily generate revenues by charging per-transaction processing fees., ~~For~~monthly ~~our~~fixed ~~wireless roaming~~fees, ~~wireline~~ and ~~SMS~~fees ~~clearinghouse~~for ~~services,~~customer ~~revenues~~implementations. ~~vary~~We ~~based~~recognize onprocessing revenues at the ~~number~~time ofthe ~~data/messaging~~transactions ~~records~~are ~~provided~~processed. toWe usrecognize bymonthly ~~telecommunications~~fixed ~~carriers~~fees ~~for~~as ~~aggregation,~~revenues ~~translation~~on ~~and~~a ~~distribution~~monthly ~~among~~basis ~~carriers.~~as ~~These~~the ~~revenues~~services are ~~based~~performed. onWe ~~the~~defer ~~number~~revenues ofand ~~wireless~~incremental ~~roaming~~customer-specific ~~subscriber~~costs ~~telephone~~related ~~calls~~to ~~and~~customer ~~messages~~implementations ~~that~~and ~~take~~recognize ~~place~~these onfees ~~our~~and ~~customers’~~costs ~~networks.~~on Wea ~~recognize~~straight-line ~~revenues~~basis atover the ~~time~~life of the ~~transactions~~initial ~~are~~customer ~~performed~~agreements.

• Call Processing Services primarily generate ~~revenue~~revenues by charging per-transaction processing fees ~~and software licensing fees~~. The per-transaction fee is based on the number of validation, authorization, and other call processing messages generated by wireless subscribers. ~~and~~We isrecognize ~~recognized~~processing asfee ~~revenue~~revenues at the time the transactions are ~~performed~~processed. ~~We also provide turnkey software solutions for which we charge customers a software licensing fee. For turnkey software, we recognize revenue when accepted by the customer.~~

• ~~Other~~Enterprise ~~Outsourcing~~Solutions ~~Services~~ primarily generate ~~revenue~~revenues by charging per-subscriber fees. We recognize these revenues at the time the service is performed.

~~Due~~• toOff-Network ~~our~~Database ~~billing~~Queries ~~cycles,~~primarily ~~which~~generate ~~for~~revenues ~~some products~~by ~~lag~~providing asaccess ~~much~~to asdatabase 60providers. ~~days~~We ~~after~~pass ~~services~~these ~~are~~charges ~~rendered,~~onto weour ~~estimate~~customers, ~~the~~with ~~amounts~~little ofor ~~unbilled~~no ~~revenue~~margin, ~~each reporting period. Our estimates are~~ based onupon ~~recent~~the ~~volume~~charges ~~and~~we ~~pricing~~receive ~~trends~~from ~~adjusted~~the ~~for~~third ~~material~~party ~~changes~~intelligent innetwork ~~contracted~~database ~~service~~providers. ~~Historically,~~ ~~our~~We ~~estimates~~recognize ~~have~~revenues ~~correlated~~at ~~well~~the ~~with~~time ~~our~~the ~~actual~~transactions ~~billed~~are ~~revenue~~processed. ~~Unanticipated changes in volume and pricing trends or material changes in contracted service could adversely affect our estimates of unbilled revenue.~~

~~Stock-Based~~Net ~~Compensation~~Income Per Common Share

We compute ~~account~~net ~~for~~income ~~our~~per ~~stock~~common ~~options~~share ~~and~~in ~~related~~accordance ~~grants~~with ~~thereunder~~Statement ~~using~~of ~~the intrinsic~~Financial ~~value~~Accounting ~~method~~Standards ~~prescribed in APB Opinion~~ No. 25 128, ~~“Accounting~~Earnings ~~for~~Per ~~Stock~~Share ~~Issued~~(SFAS ~~to Employees~~128).” ~~However,~~Basic ~~pro forma information regarding~~ net income ~~and earnings~~ per common share asincludes ~~required~~no bydilution ~~Statement~~and ofis ~~Financial~~computed ~~Accounting Standards~~by ~~No.~~dividing ~~123,~~earnings available ~~“Accounting~~to ~~for~~common ~~Stock~~shareholders ~~Based~~by ~~Compensation”~~the ~~(SFAS~~weighted ~~123),~~average isnumber ~~provided~~of incommon ~~our~~shares ~~financial~~outstanding ~~statements~~for ~~and~~the isperiod. ~~determined~~Diluted asnet ifincome weper ~~had~~common ~~accounted~~share ~~for~~includes ~~our~~the ~~employee~~potential ~~and~~dilution ~~non-employee~~from ~~director stock options under~~ the ~~fair~~exercise ~~value method~~ of ~~SFAS~~stock ~~123,~~options asand ~~amended~~restricted ~~by SFAS 148~~stock.

~~Outstanding~~On January 1, 2009, we adopted FASB Staff Position Emerging Issues Task Force (EITF) 03-6-1, Determining Whether Instruments Granted in ~~options~~Share-Based Payment Transactions are Participating Securities (FSP EITF 03-6-1). Under FSP EITF 03-6-1, unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are treated as participating securities and are included in the computation of ~~June~~earnings 30per share pursuant to the two-class method in accordance with SFAS 128. Certain of our unvested share-based payment awards contain nonforfeitable rights to dividends and dividend equivalents. Upon adoption of FSP EITF 03-6-1, ~~2004~~we used the two-class method in the computation of earnings per share for the three and ~~June~~six months ended June 30, ~~2003~~2009 ~~had~~and aretrospectively ~~weighted~~adjusted ~~average~~our ~~remaining~~net ~~contractual~~income ~~life~~per ofcommon ~~8.6~~share data for the three and ~~8.9~~six ~~years~~months ended June 30, ~~respectively~~2008 to conform with the provisions in FSP EITF 03-6-1.

~~Pro~~The ~~forma~~following ~~information~~table ~~regarding~~displays ~~net income and earnings per share is required by SFAS 123, which also requires that~~ the ~~information be determined as if we~~ ~~had~~computation ~~accounted~~of ~~for~~net ~~our~~income ~~employee~~per ~~stock~~common ~~options~~share ~~granted subsequent to December 31, 1994 under the fair value method set forth in SFAS 123. The fair value for these options was estimated at the date of grant~~ using ~~a Black-Scholes option-pricing model with~~ the ~~following weighted~~two-~~average~~class ~~assumptions~~method:

	Six MonthsEndedJune 30,
	Three Months EndedJune 30,							Six Months EndedJune 30,
	2004			2003
	2009				2008			2009			2008
Risk-free interest rate	4.30	%		4.30	%
Basic and diluted net income per common share:
Volatility factor	—			—
Net income	$	16,478			$	20,352		$	32,510		$	35,745
Dividend yield	—			—
Less: net income allocated to restricted stock		(156	)			(226	)		(289	)		(409	)
Weighted average expected life of options	5			5
Net income available to common shareholders	$	16,322			$	20,126		$	32,221		$	35,336
Determination of basic and diluted shares:
Basic weighted-average common shares outstanding		67,945,059				67,618,711			67,906,908			67,563,617
Potentially dilutive stock options and restricted stock		83,534				121,095			73,309			85,503
Diluted weighted-average common shares outstanding		68,028,593				67,739,806			67,980,217			67,649,120
Basic net income per common share	$	0.24			$	0.30		$	0.47		$	0.53
Diluted net income per common share	$	0.24			$	0.30		$	0.47		$	0.52

~~The~~For ~~Black-Scholes option valuation model was developed for use in estimating~~ the ~~fair~~six ~~value~~months ofended ~~traded options~~June 30, ~~which~~2009 ~~have no vesting restrictions~~ and ~~are~~2008, ~~fully~~options ~~transferable.~~to Inpurchase ~~addition~~2,338,760 ~~option~~and ~~valuation~~1,604,178 shares ~~models require the input~~ of ~~highly~~common ~~subjective assumptions including the expected~~ stock ~~price~~were ~~volatility.~~outstanding ~~Since~~during ~~Syniverse~~the ~~Inc.’s~~periods ~~common~~but ~~stock~~were ~~does~~ not ~~trade~~included onin ~~public~~the ~~markets,~~computation ~~a volatility~~ of 0%diluted ~~was~~net ~~entered~~income ~~into~~per ~~the~~common ~~Black-Scholes~~share ~~option~~because ~~valuation~~their ~~model.~~effect ~~Because~~would ~~our~~be ~~stock~~anti-dilutive. ~~options~~No ~~have~~additional ~~characteristics significantly~~securities ~~different~~were ~~from~~outstanding ~~those~~that ofcould ~~traded~~potentially dilute ~~options,~~basic ~~and~~net ~~because~~income ~~changes~~per incommon ~~the~~share ~~subjective~~that ~~input~~were ~~assumptions~~not ~~can~~included ~~materially affect the fair value estimate,~~ in ~~management’s opinion,~~ the ~~existing~~computation ~~models do not necessarily provide a reliable single measure~~ of ~~the~~diluted ~~fair value of our employee stock options. Our pro forma amounts are immaterially different from the reported~~ net income ~~amounts~~per ~~and~~common ~~hence are not disclosed~~share.

~~Earnings~~Comprehensive ~~Per~~Income ~~Share~~

WeComprehensive doincome ~~not~~is ~~present~~comprised ~~earnings~~of ~~per~~changes ~~share~~in ~~since~~our ~~Syniverse~~currency ~~LLC’s~~translation ~~units~~adjustment ~~are~~account ~~not~~and ~~publicly~~net ~~traded~~changes ~~and~~in the ~~calculation~~fair ~~would~~value ~~be meaningless~~of ~~due~~our tointerest ~~the~~rate ~~small~~swap. ~~number~~Comprehensive income, net of ~~units~~taxes, ~~outstanding.~~for the three and six months ended June 30, 2009 and 2008 is as follows:

Other Comprehensive Income (Loss)


	Three Months Ended June 30,				Six Months Ended June 30,
	2009		2008		2009		2008
Net income	$	16,478	$	20,352	$	32,510	$	35,745
Foreign currency translation adjustments (1)		13,040		209		3,582		6,177
Net change in fair value of interest rate swap (2)		252		—		341		—

Comprehensive income	$	29,770	$	20,561	$	36,433	$	41,922

~~Other comprehensive income~~ (~~loss~~1) ~~includes~~Foreign ~~foreign~~ currency translation adjustments ~~and~~are ~~unrealized~~shown ~~gains~~net ~~and~~of ~~losses~~tax onof ~~marketable~~$(1,944) ~~securities~~and ~~classified~~$495 ~~as available-~~for~~-sale.~~ ~~Other~~the ~~comprehensive~~three ~~income~~months ~~(loss)~~ended ~~for~~June ~~the~~30, ~~three~~2009 and ~~six~~2008, ~~months~~respectively, ~~ended~~and ~~June~~net 30of tax of $2, ~~2004~~065 and ~~the~~$(3,641) ~~three~~for ~~and~~the six months ended June 30, ~~2003~~2009 isand as2008, ~~follows:~~ respectively.

	Three Months EndedJune 30,					Six Months EndedJune 30,
	2004			2003		2004			2003
Net income (loss)	$	10,620		$	1,287	$	11,831		$	(1,892	)
Net unrealized gain on investments		41			—		9			—
Foreign currency translation adjustment		(26	)		—		(6	)		—
Other comprehensive income (loss)	$	10,635		$	1,287	$	11,834		$	(1,892	)

(2)

The change in fair value of the interest rate swap is shown net of tax of $160 and $0 for the three months ended June 30, 2009 and 2008, respectively, and net of tax of $143 and $0 for the six months ended June 30, 2009 and 2008, respectively.

The ~~balance~~following intable ~~our accumulated~~summarizes ~~other~~the ~~comprehensive~~allocation ~~income as~~ of total ~~June~~comprehensive ~~30,~~income ~~2004~~between isshareholders ~~comprised~~ of ~~$435~~Syniverse inHoldings, ~~unrealized~~Inc. ~~gains~~ and ~~$(6)~~the innoncontrolling ~~foreign~~interest: ~~currency translation adjustments.~~

Available-for-Sale Securities


	Three Months Ended June 30, 2009							Six Months Ended June 30, 2009
	Shareholders of Syniverse Holdings, Inc.		Noncontrolling Interest			Total		Shareholders of Syniverse Holdings, Inc.		Noncontrolling Interest			Total
Net income	$	16,531	$	(53	)	$	16,478	$	32,563	$	(53	)	$	32,510
Foreign currency translation adjustments		12,979		61			13,040		3,521		61			3,582
Net change in fair value of interest rate swap		252		—			252		341		—			341

Comprehensive income	$	29,762	$	8		$	29,770	$	36,425	$	8		$	36,433

~~Our~~The ~~investments~~balance in equity securities are composed of a less than 10% ownership in a small publicly held company, and are categorized as available-for-sale as defined by Statement of Financial Accounting Standards No. 115, “Accounting for Certain Investments in Debt and Equity Securities” (SFAS 115). These equity securities are included in other current assets in the accompanying condensed consolidated balance sheets and are recorded at fair value based on quoted market prices. The cost of each equity security is determined primarily on a specific identification method. Unrealized holding gains and losses are reflected, net of income tax, as a separate component of accumulated other comprehensive ~~income (~~loss). Atas ~~June~~of June 30, ~~2004~~2009 and December 31, 2008 ~~2003,~~was ~~available-for-sale securities had a fair value of~~ $~~435 and $426~~15,173 respectively. Because the cost of these securities had previously been written off due to other-than temporary declines in value, the fair value of these securities reflects unrealized holding gains of $435 and $~~426 at June 30~~19, ~~2004 and December 31~~035, ~~2003,~~ respectively.

~~Foreign~~Joint ~~Currency~~Venture ~~Translation~~Interests

InWe ~~accordance~~hold ~~with~~a ~~Statement~~5% ofinterest ~~Financial~~in ~~Accounting~~the ~~Standard~~joint ~~No.~~venture ~~52, “Foreign~~mTLD ~~Currency~~Top ~~Translation”~~Level ~~(SFAS~~Domain, ~~52)~~Ltd., ~~income~~a ~~and~~joint ~~expense~~venture ~~accounts~~formed ofto ~~foreign~~provide ~~operations~~mobile ~~are~~data ~~translated at the weighted average exchange rates during the year. Assets, including goodwill,~~ and ~~liabilities~~content ofdomain ~~foreign~~name ~~operations that~~registry ~~operate~~services inand adevelopment ~~local~~guidelines. ~~currency~~We ~~environment~~account ~~are~~for ~~translated~~this toinvestment ~~U.S.~~using ~~dollars at~~ the ~~exchange~~cost ~~rates~~method inof ~~effect~~accounting. atAs ~~the~~of ~~balance sheet date~~June 30, ~~with~~2009 ~~the~~and ~~related~~December 31, ~~translation~~2008, ~~gains~~our orinvestment ~~losses~~was ~~reported~~$888 asand ais ~~separate~~included ~~component~~in ofother ~~unitholders’ equity~~assets.

~~Segment~~In ~~Information~~February 2009, we entered into a joint venture agreement to implement number portability services in India. Our economic interest in the joint venture is 37.5%. We expect to provide India’s telecommunications operators with number portability clearinghouse and centralized database solutions for the next 10 years. We have determined that the joint venture is a variable interest entity (VIE) under FASB Interpretation No. 46(R), Consolidation of Variable Interest Entities (FIN 46(R)). FIN 46(R) provides a framework for identifying VIE’s and determining when a company should include the assets, liabilities, noncontrolling interests and results of operations of a VIE in its consolidated financial statements. FIN 46(R) requires a VIE to be consolidated if a party with an ownership, contractual or other financial interest in the VIE (a variable interest holder) is obligated to absorb a majority of the risk of loss from the VIE’s activities, is entitled to receive a majority of the VIE’s residual returns (if no party absorbs a majority of the VIE’s losses), or both. A variable interest holder that consolidates the VIE is called the primary beneficiary. We have determined that we are the primary beneficiary of the joint venture. As a result, we have consolidated the joint venture in accordance with FIN 46(R).

In all periods, we operated as a single segment. In the three months ended June 30, 2004 and 2003, we derived 90.7% and 87.4%, respectively, of our revenues from customers in the United States. In the six months ended June 30, 2004 and 2003, we derived 89.6% and 87.5%, respectively, of our revenues from customers in the United States.

3. Unitholders’ Interests

The Class B Preferred Units are entitled to an annual cumulative preferred yield of 10.0%, compounded quarterly. At June 30, 2004, there were 252,367.50 of Class B Preferred Units outstanding. As of June 30, 2004, undeclared and unpaid preferred unit dividends totaled $66,920. These amounts are not recorded as liabilities until declared.

In the six months ended June 30, 2004, 135,135 common units were issued for $4 to a company executive. In the six months ended June 30, 2003, 405,405 common units were issued for $13 and 270,270 common units were repurchased for $9 from certain company executives.

4The following table provides a reconciliation of the beginning and the ending carrying amounts of total equity, equity attributable to shareholders of Syniverse Holdings, Inc. ~~Restructurings~~and equity attributable to the noncontrolling interest:

On February 28, 2003, we completed a restructuring plan resulting in the termination of 71 employees or approximately 10.6% of our workforce. As a result, we incurred $1,841 in severance related costs in February 2003. The payments related to this restructuring were completed in November 2003. We expected this reorganization to result in reduced annual expenses of approximately $5,838.


				Shareholders of Syniverse Holdings, Inc.
	Total			Common Stock		Additional Paid-In Capital			Retained Earnings		Accumulated Other Comprehensive Income (Loss)			Treasury Stock			Noncontrolling Interest
Balance at December 31, 2008	$	535,842		$	68	$	471,524		$	83,315	$	(19,035	)	$	(30	)	$	—
Comprehensive income (1)		36,425			—		—			32,563		3,862			—			8
Issuance of stock for stock-based compensation		95			—		95			—		—			—			—
Stock-based compensation		3,015			—		3,015			—		—			—			—
Issuances of stock under employee stock purchase plan		415			—		415			—		—			—			—
Minimum tax withholding on restricted stock awards		(266	)		—		(266	)		—		—			—			—
Purchase of treasury stock		—			—		(15	)		—		—			15			—
Capital contribution from noncontrolling interest in a joint venture		—			—		—			—		—			—			981

Balance at June 30, 2009	$	575,526		$	68	$	474,768		$	115,878	$	(15,173	)	$	(15	)	$	989

On(1) ~~April~~The ~~20,~~allocation ~~2004,~~of wethe ~~completed~~individual acomponents ~~restructuring~~of ~~plan~~comprehensive inincome ~~connection~~attributable ~~with~~to ~~our acquisition~~shareholders of Syniverse Holdings ~~resulting in the termination of 10 employees. As a result~~, ~~we incurred $289 in severance related costs in April 2004~~Inc. ~~The~~and ~~payments~~the ~~related~~noncontrolling tointerests ~~this~~is ~~were~~disclosed ~~completed~~ in ~~April~~the ~~2004.~~comprehensive Weincome ~~expect~~section ~~this reorganization to result in reduced annual expenses~~ of ~~approximately~~Note ~~$1,080~~2. ~~Further restructuring may be necessary in light of current economic conditions.~~

InCustomer ~~the~~Accounts ~~six months ended June 30, 2004, we had the following activity in our restructuring accruals:~~

	January 1, 2004Balance		Additions		Payments			June 30, 2004Balance
April 2004 Restructuring Termination costs	$	93	$	289	$	(382	)	$	—
Total	$	93	$	289	$	(382	)	$	—

We provide financial settlement services to wireless operators to support the payment of roaming related charges to their roaming network partners. In accordance with our contract with the customer, funds are held by us as an agent on behalf of our customers to settle their roaming related charges to other operators. These funds and the corresponding liability are not reflected in our consolidated balance sheet. The off-balance sheet amounts totaled approximately $131,646 and $101,311 as of June 30, 2009 and December 31, 2008, respectively.

5.Derivative ~~Commitments~~Instruments and ~~contingencies~~ Hedging Activities

We account for derivative financial instruments under FASB Statement No. 133, Accounting for Derivative Instruments and Hedging Activities, as amended (SFAS 133). Under ~~the~~SFAS ~~terms~~133, ofall derivatives are recorded on the ~~Syniverse~~consolidated ~~Holdings~~balance ~~acquisition~~sheets as assets or liabilities and measured at fair ~~agreement~~value. For derivatives designated as cash flow hedges, wethe ~~agreed~~effective toportion ~~make~~of anthe ~~additional~~changes ~~payment~~in ~~not~~fair tovalue ~~exceed~~of ~~2,000~~the ~~British~~derivatives ~~pounds~~are torecorded in accumulated other comprehensive income (loss) and subsequently recognized in earnings when the ~~former~~hedged ~~owners~~items impact income. Changes in the fair value of derivatives not designated as hedges and the ~~acquired~~ineffective ~~company~~portion noof ~~later~~cash ~~than~~flow ~~March~~hedges ~~31,~~are ~~2005~~recorded ifin ~~this~~current ~~operation~~earnings. ~~achieves~~We ahave ~~certain~~designated ~~pre-determined~~our ~~profitability~~interest rate swap as ~~measured~~a bycash ~~EBITDA~~flow hedge that effectively swaps ~~(earnings~~variable ~~before~~rate interest, ~~taxes,~~based ~~depreciation~~on ~~and~~1-month ~~amortization)~~LIBOR to a fixed rate interest thereby reducing our exposure to interest rate fluctuations. NoWe ~~amounts~~do ~~have~~not ~~been~~hold ~~accrued~~or enter into financial instruments for ~~this~~speculative ~~additional~~trading ~~earn-out~~purposes. asSee ofNote ~~June~~7 ~~30,~~for ~~2004~~more information on our interest rate swap.

WeForeign ~~are~~Currencies currently a party to various claims and legal actions that arise in the ordinary course of business. We believe such claims and legal actions, individually and in the aggregate, will not have a material adverse effect on our business, financial condition or results of operations. As of June 30, 2004, we have considered all of the claims and disputes of which we are aware and accrued amounts in our analysis of doubtful accounts, allowances for credit memos or probable loss accruals.

~~The~~We ~~most~~have significant ofoperations ~~these~~in ~~claims~~subsidiaries in Europe, primarily the United Kingdom and Germany, and the Asia-Pacific region whose functional currency is their local currency. Gains and losses on transactions denominated in ~~terms~~currencies other than the functional currencies are included in determining net income for the period. For the three and six months ended June 30, 2009, we recorded foreign currency transaction gains of ~~dollars~~$847 ~~sought~~and $1,134, respectively. isFor ~~described~~the ~~below~~three and six months ended June 30, 2008, we recorded foreign currency transaction gains of $272 and $215, respectively.

~~SBC~~The ~~Communications,~~assets ~~Inc., d/b/a SBC Ameritech, SBC Southwestern Bell~~ and ~~SBC~~liabilities ~~Pacific~~of ~~Bell~~subsidiaries ~~(collectively,~~whose ~~SBC),~~functional ~~have~~currency ~~asserted claims~~is ~~against~~other usthan in the ~~total principal sum of $7,281, based on alleged overcharging for QRS and CNAM hubbing and transport services we provided~~U. ~~SBC also has refused to pay us an additional $1,900 related to these same services~~S. Dollar ~~We deny the claims and believe they~~ are ~~unfounded~~translated ~~and~~at ~~intend~~the toperiod-end ~~vigorously~~rate ~~defend~~of ~~ourselves~~exchange. OnThe ~~April~~resulting ~~15,~~translation ~~2003,~~adjustment weis ~~filed~~recorded ~~suit~~as ~~against SBC Southwestern Bell and SBC Pacific Bell in Hillsborough County Circuit Court seeking monetary damages and~~ a ~~determination~~component ~~that SBC is not entitled to any sum it claims it is owed. Our lawsuit was removed to Federal Court by SBC on the grounds~~ of ~~diversity~~accumulated ~~jurisdiction. We disputed the grounds for removal and moved to remand the action to state court. The Federal Court granted~~other ~~our~~comprehensive ~~motion~~income to(loss) ~~remand~~ and ~~the action~~ is ~~now~~included ~~pending~~ in ~~state~~stockholders’ ~~court in Florida~~equity. ~~SBC~~Translation ~~Pacific~~gains ~~Bell~~and ~~also~~losses ~~filed a motion to dismiss the Florida action~~ on ~~the~~intercompany ~~grounds~~balances ofwhich aare ~~lack~~deemed ~~of jurisdiction, while SBC Southwestern Bell filed a motion~~ to ~~abate~~be ~~and/or transfer~~of ~~the Florida action based on~~ a ~~lawsuit~~long-term ~~SBC~~investment ~~Southwestern~~nature ~~Bell~~are ~~filed~~also ~~against~~recorded usas ~~in Texas state court on October 6, 2003 seeking approximately $2,000. We retained Texas counsel to seek~~ a ~~stay~~component of ~~the~~other ~~Texas~~comprehensive ~~proceedings pending disposition of the matter in Florida~~income. On April 20, 2004, the Texas Court granted our request and abated the Texas action. SBC Pacific Bell withdrew its motion to dismiss the Florida action. Both SBC Southwestern Bell and SBC Pacific Bell have filed an answer and ~~counterclaim~~Income instatement ~~the~~items ~~Florida~~are ~~action.~~translated Onat ~~June 28, 2004, SBC Ameritech filed a Demand for Arbitration in Chicago seeking $2,122 it claims it was over billed by us. We filed a motion to dismiss/abate~~ the ~~Demand~~average ~~based~~rates onduring ~~SBC Ameritech’s failure to engage in mediation prior to Arbitration, as required by~~ the ~~contract under which it alleges it was over billed~~period.

6. Second Amendment to Credit Agreement

On March 11, 2004, we entered into the Second Amendment (the “Second Amendment”) with our lenders (Term B Loan and Revolving Credit) signatory thereto and Lehman Commercial Paper Inc., as administrative agent for the lenders (the “Agent”). The Second Amendment amends our senior credit facility by (i) providing for the incurrence under our senior credit

~~facility~~Segment ofInformation new Term B Loans, which will refinance, in full, all remaining outstanding Term B Loans and (ii) reduces the percentage of Excess Cash Flow which must be applied to prepay the loans to 75%. The Applicable Margin with respect to the Term B Loans is 2.5% for Base Rate Loans and 3.5% for Eurodollar Loans. The cost of the amendment of $407 was recognized in interest expense in the six months ended June 30, 2004.

For all periods reported, we operated as a single segment, since our chief operating decision maker decides resource allocations on the basis of our consolidated financial results. For the three months ended June 30, 2009 and 2008, we derived 68.9% and 68.0%, respectively, of our revenues from customers in the United States. For the six months ended June 30, 2009 and 2008, we derived 68.4% and 67.5%, respectively, of our revenues from customers in the United States.

Revenues by service offerings were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2009		2008		2009		2008
Technology Interoperability Services	$	66,343	$	80,209	$	129,263	$	148,911
Network Services		30,819		31,643		60,794		61,384
Number Portability Services		7,788		6,435		15,028		13,385
Call Processing Services		6,435		7,313		13,592		15,702
Enterprise Solutions		390		634		780		1,419
Off-Network Database Queries		1,703		1,385		2,945		2,463

Total Revenues	$	113,478	$	127,619	$	222,402	$	243,264

Revenues by geographic region, based on the “bill to” location on the invoice, were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2009		2008		2009		2008
North America	$	81,731	$	90,932	$	159,940	$	173,145
Asia Pacific		9,406		11,855		18,871		22,073
Caribbean and Latin America		7,707		7,456		15,658		15,315
Europe, Middle East and Africa		12,931		15,991		24,988		30,268
Off-Network Database Queries (i)		1,703		1,385		2,945		2,463

Total Revenues	$	113,478	$	127,619	$	222,402	$	243,264

(i)	Off-Network Database Queries are not allocated to geographic regions.

Income Taxes

We provide for federal, state and foreign income taxes currently payable, as well as for those deferred due to timing differences between reporting income and expenses for financial statement purposes versus tax purposes. Federal, state and foreign tax benefits are recorded as a reduction of income taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect of a change in income tax rates is recognized as income or expense in the period that includes the enactment date. During the six months ended June 30, 2009 and 2008, the effective tax rate was 33.5% and 37.1%, respectively. During the six months ended June 30, 2009, the income tax provision was adjusted for a tax benefit of approximately $1,443 due to an adjustment for an item believed to be non-deductible in prior periods.

We, and our eligible subsidiaries, file a consolidated U.S. federal income tax return. All subsidiaries incorporated outside of the U.S. are consolidated for financial reporting purposes, however, they are not eligible to be included in our consolidated U.S. federal income tax return. Separate provisions for income taxes have been recorded for these entities. We intend to reinvest substantially all of the unremitted earnings of our non-U.S. subsidiaries and postpone their remittance indefinitely. Accordingly, no provision for U.S. income taxes for these non-U.S. subsidiaries was recorded in the accompanying consolidated statements of income.

3. Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2007, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of Accounting Research Bulletin No 51 (SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, changes in a parent’s ownership of a noncontrolling interest, calculation and disclosure of the consolidated net income attributable to the parent and the noncontrolling interest, changes in a parent’s ownership interest while the parent retains its

7 controlling financial interest and fair value measurement of any retained noncontrolling equity investment. ~~Supplemental~~SFAS ~~Consolidating~~160 ~~Financial~~is ~~Information~~effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. We adopted SFAS 160 on January 1, 2009. The adoption of SFAS 160 did not have a material impact on our financial position and results of operations.

~~Syniverse’s~~In ~~payment~~December ~~obligations~~2007, ~~under~~ the ~~senior~~FASB ~~notes~~issued ~~are~~Statement ~~guaranteed~~of byFinancial ~~Syniverse~~Accounting ~~LLC,~~Standards ~~Syniverse Inc~~No., 141 ~~and~~(revised ~~all~~2007), Business ~~domestic~~Combinations ~~subsidiaries~~(SFAS of141R). ~~Syniverse~~SFAS ~~including~~141R ~~Syniverse~~provides ~~Finance,~~revised ~~Syniverse~~guidance ~~Networks,~~on ~~and~~how ~~Syniverse~~acquirers ~~Brience~~recognize ~~(collectively,~~and measure the ~~Guarantors).~~consideration ~~Syniverse~~transferred, BVidentifiable ~~and~~assets ~~Syniverse~~acquired, ~~Holdings~~liabilities ~~are~~assumed, ~~not~~noncontrolling ~~guarantors~~interests, ~~however,~~and ~~their~~goodwill ~~results~~acquired ~~are~~in ~~immaterial~~a business ~~and~~combination. ~~are~~SFAS ~~included in~~141R also expands required disclosures surrounding the ~~results~~nature and financial effects of ~~Syniverse~~business combinations. ~~Such~~SFAS ~~guarantees~~141R ~~are~~is ~~full~~effective, ~~unconditional~~on ~~and~~a ~~joint~~prospective ~~and~~basis, ~~several.~~for ~~The~~fiscal ~~following~~years ~~supplemental~~beginning ~~financial~~after ~~information~~December 15, ~~sets~~2008. ~~forth,~~We adopted onSFAS an141R ~~unconsolidated~~on ~~basis~~January 1, ~~balance~~2009. ~~sheets,~~The ~~statements~~adoption of ~~operations,~~SFAS ~~and~~141R ~~statements~~did ofnot ~~cash flows~~have ~~information~~a ~~for~~significant ~~Syniverse~~impact ~~LLC~~on ~~(parent~~our ~~only),~~consolidated ~~Syniverse~~financial ~~Inc.~~statements, and ~~for~~ the ~~guarantor~~impact ~~subsidiaries.~~that ~~The~~its ~~supplemental~~adoption will have on our consolidated financial ~~information~~statements ~~reflects~~in future periods will depend on the ~~investments~~nature ofand ~~Syniverse~~size ~~LLC,~~of ~~Syniverse,~~business ~~Inc.~~combinations ~~and~~completed ~~Syniverse~~subsequent ~~using~~to the ~~equity~~date ~~method~~ of ~~accounting~~ adoption.

~~CONSOLIDATING~~In ~~BALANCE~~May ~~SHEET~~2009, the FASB issued Statement of Financial Accounting Standards No. 165, Subsequent Events (SFAS 165), which provides guidance to establish general standards of accounting for, and disclosures of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 is effective for interim or fiscal periods ending after June 15, 2009. We adopted SFAS 165 on June 30, 2009. Adoption of SFAS 165 did not have a material impact on our financial position and results of operations.

ASRecently OFIssued ~~JUNE~~Accounting ~~30,~~Pronouncements ~~2004~~

	SyniverseLLC			SyniverseInc.			Syniverse			SubsidiaryGuarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash	$	—		$	—		$	11,156		$	2		$	—		$	11,158
Accounts receivable, net of allowances		—			—			28,938			43,848			—			72,786
Accounts receivable - affiliates		48			—			51,051			938			(52,037	)		—
Deferred tax assets		—			—			—			369			—			369
Prepaid and other current assets		—			—			5,693			483			—			6,176
Total current assets		48			—			96,838			45,640			(52,037	)		90,489
Property and equipment, net		—			—			12,422			25,280			—			37,702
Capitalized software, net		—			—			52,282			11,405			—			63,687
Deferred costs, net		—			—			13,108			—			—			13,108
Goodwill		—			—			59,957			271,402			—			331,359
Identifiable intangibles, net:
Customer contract, net		—			—			4,534			2,925			—			7,459
Customer base, net		—			—			104,833			86,010			—			190,843
Notes receivable-affiliates		—			—			—			401,985			(401,985	)		—
Investment in subsidiaries		225,566			223,582			772,876			396			(1,222,420	)		—
Total assets	$	225,614		$	223,582		$	1,116,850		$	845,043		$	(1,676,442	)	$	734,647
LIABILITIES AND UNITHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—		$	—		$	6,850		$	—		$	—		$	6,850
Accounts payable - affiliates		—			—			3,899			48,137			(52,036	)		—
Accrued payroll and related benefits		—			—			6,871			—			—			6,871
Accrued interest		—			—			13,859			—			—			13,859
Other accrued liabilities		—			—			22,900			70			—			22,970
Current portion of Term B Loan, net of discount		—			—			35,835			—			—			35,835
Total current liabilities		—			—			90,214			48,207			(52,036	)		86,385
Long-term liabilities:
Deferred taxes		—			—			2,292			21,579			—			23,871
Payable to affiliate		—			—			401,985			—			(401,985	)		—
Subordinated Notes, net of discount		—			—			241,427			—			—			241,427
Term B Loan, net of discount		—			—			154,375			—			—			154,375
Other long-term liabilities		—			—			2,975			—			—			2,975
Total long-term liabilities		—			—			803,054			21,579			(401,985	)		422,648
Unitholders’ equity:
Class A Preferred Units		—			—			—			—			—			—
Class B Preferred Units		252,367			—			—			—			—			252,367
Common Units		120,355			—			—			—			—			120,355
Common Stock		—			99			—			—			(99	)		—
Preferred Stock		—			3			—			—			(3	)		—
Additional paid-in capital		—			370,588			370,690			1,002,256			(1,743,534	)		—
Accumulated deficit		(147,537	)		(147,537	)		(147,537	)		(227,475	)		522,549			(147,537	)
Accumulated other comprehensive income		429			429			429			476			(1,334	)		429
Total unitholders’ equity		225,614			223,582			223,582			775,257			(1,222,421	)		225,614
Total liabilities and unitholders’ equity	$	225,614		$	223,582		$	1,116,850		$	845,043		$	(1,676,442	)	$	734,647

In June 2009, the FASB issued SFAS 167, Amendments to FASB Interpretation No. 46(R) (SFAS 167). SFAS 167 eliminates FASB Interpretation 46(R)’s exceptions to consolidating qualifying special-purpose entities, contains new criteria for determining the primary beneficiary, and increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity. SFAS 167 also contains a new requirement that any term, transaction, or arrangement that does not have a substantive effect on an entity’s status as a variable interest entity, a company’s power over a variable interest entity, or a company’s obligation to absorb losses or its right to receive benefits of an entity must be disregarded in applying FASB Interpretation 46(R)’s provisions. The elimination of the qualifying special-purpose entity concept and its consolidation exceptions means more entities will be subject to consolidation assessments and reassessments. SFAS 167 is effective as of the beginning of an enterprise’s first fiscal year beginning after November 15, 2009, and for interim periods within that first period, with earlier adoption prohibited. We are currently assessing the potential impacts, if any, on our consolidated financial statements.

4. Acquisition of Wireless Solutions International

On May 15, 2009, we acquired Wireless Solutions International (WSI) pursuant to an Asset Purchase Agreement. Under the Purchase Agreement, we acquired all of the assets of WSI for an aggregate purchase price of $3,572 which was funded by existing cash balances and an award of 200,000 shares of common stock to WSI and five individuals. These five individuals, along with the sole shareholder of WSI at the time of its acquisition, became employees of the Company on the closing date. Each award of shares has been placed into escrow and will be disbursed in 32 months if certain employment conditions are met.

The transaction was accounted for under the acquisition method in accordance with SFAS 141R. The total purchase price of $3,572 was allocated to the assets and liabilities, on a preliminary basis, based upon their estimated fair value as of the date of the acquisition. As a result, the purchase price allocation is not yet finalized and preliminary estimates and assumptions are subject to change. Assets acquired primarily consisted of $389 of cash, $489 of accounts receivables, $700 of software technology, $200 of customer relationships as well as liabilities assumed of $578. Goodwill in the amount of $2,443 was recorded in relation to this acquisition. The common stock award of 200,000 shares was issued from treasury shares and will be accounted for as stock-based compensation due to the employment conditions of the award.

WSI provides a GSM Association (GSMA)-certified Open Connectivity roaming hub and global managed roaming and wireless network solutions that will further enhance Syniverse’s global roaming reach. The acquisition of WSI will extend Syniverse’s relationships with a number of existing customers and introduce new relationships with several operators across the Americas.

5. Goodwill

The changes to the carrying value of goodwill during the six months ended June 30, 2009 were as follows:


Goodwill balance as of December 31, 2008	$	596,662
WSI acquisition		2,443
Effect of foreign currency translation		2,483

Goodwill balance as of June 30, 2009	$	601,588

~~CONSOLIDATING~~6. ~~STATEMENT~~Stock-Based OFCompensation ~~OPERATIONS~~

~~SIX~~Syniverse ~~MONTHS~~has ~~ENDED~~three ~~JUNE~~stock-based 30compensation plans, ~~2004~~the Founders’ Stock Option Plan for non-employee directors, executives and other key employees of Syniverse, Inc., the Directors’ Stock Option Plan, which provides for grants to independent directors, and the 2006 Long-Term Equity Incentive Plan, which provides incentive compensation through grants of incentive or non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights (“SARs”), performance awards or any combination of the foregoing.

	SyniverseLLC			SyniverseInc.			Syniverse			SubsidiaryGuarantors			Eliminations			Consolidated
Revenues	$	—		$	—		$	67,131		$	94,480		$	—		$	161,611
Costs and expenses:
Cost of operations		—			—			22,230			49,196			—			71,426
Sales and marketing		—			—			4,810			5,634			—			10,444
General and administrative		—			—			6,836			10,689			—			17,525
Provision for (recovery of) uncollectible accounts		—			—			4			(13	)		—			(9	)
Depreciation and amortization		—			—			12,180			8,001			—			20,181
Restructuring		—			—			289			—			—			289
		—			—			46,349			73,507			—			119,856
Operating income		—			—			20,782			20,973			—			41,755
Other income (expense), net:
Income from equity investment		11,831			16,023			47,552			—			(75,406	)		—
Interest income		—			—			427			35,046			(34,875	)		598
Interest expense		—			—			(52,732	)		(8,467	)		34,875			(26,324	)
Other, net		—			—			(6	)		—			—			(6	)
		11,831			16,023			(4,759	)		26,579			(75,406	)		(25,732	)
Income before provision for income taxes		11,831			16,023			16,023			47,552			(75,406	)		16,023
Provision for income taxes		—			4,192			4,192			18,655			(22,847	)		4,192
Net income		11,831			11,831			11,831			28,897			(52,559	)		11,831
Preferred unit dividends		(15,386	)		(15,393	)		—			(11,489	)		26,882			(15,386	)
Net income (loss) attributable to common unitholders	$	(3,555	)	$	(3,562	)	$	11,831		$	17,408		$	(25,677	)	$	(3,555	)

The impact to our income from operations of recording stock-based compensation for the three and six months ended June 30, 2009 and 2008 was as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2009		2008		2009		2008
Cost of operations	$	67	$	74	$	106	$	81
Sales and marketing		456		353		680		617
General and administrative		1,385		920		2,229		1,726

Total stock-based compensation	$	1,908	$	1,347	$	3,015	$	2,424

The following table summarizes information about our stock option activity:


Stock Options	Shares
Outstanding at December 31, 2008	1,785,877
Granted	593,450
Exercised	(8,121	)
Cancelled or expired	(32,446	)

Outstanding at June 30, 2009	2,338,760

Exercisable at June 30, 2009	808,662

Changes in our restricted stock were as follows:


Restricted Stock	Shares
Unvested at December 31, 2008	604,800
Granted	70,880
Vested	(18,000	)
Forfeited	(120,400	)

Unvested at June 30, 2009	537,280

We issued 8,121 and 103,865 shares related to stock option exercises during the six months ended June 30, 2009 and 2008, respectively. We issued 60,950 and 30,806 shares related to the employee stock purchase plan during the six months ended June 30, 2009 and 2008, respectively.

~~CONSOLIDATING~~Accounting ~~STATEMENT~~for OFStock-Based ~~OPERATIONS~~Compensation

~~THREE~~Stock ~~MONTHS~~Options ~~ENDED JUNE 30, 2004~~

	SyniverseLLC			SyniverseInc.			Syniverse			SubsidiaryGuarantors			Eliminations			Consolidated
Revenues	$	—		$	—		$	34,537		$	50,404		$	—		$	84,941
Costs and expenses:
Cost of operations		—			—			11,350			24,921			—			36,271
Sales and marketing		—			—			2,317			2,852			—			5,169
General and administrative		—			—			3,456			5,448			—			8,904
Provision for (recovery of) uncollectible accounts		—			—			(120	)		(137	)		—			(257	)
Depreciation and amortization		—			—			5,778			4,113			—			9,891
Restructuring		—			—			289			—			—			289
		—			—			23,070			37,197			—			60,267
Operating income		—			—			11,467			13,207			—			24,674
Other income (expense), net:
Income from equity investment		10,620			12,708			26,514			—			(49,842	)		—
Interest income		—			—			324			13,307			(13,204	)		427
Interest expense		—			—			(25,597	)		—			13,204			(12,393	)
Other, net		—			—			—			—			—			—
		10,620			12,708			1,241			13,307			(49,842	)		(11,966	)
Income before provision for income taxes		10,620			12,708			12,708			26,514			(49,842	)		12,708
Provision for income taxes		—			2,088			2,088			9,334			(11,422	)		2,088
Net income		10,620			10,620			10,620			17,180			(38,420	)		10,620
Preferred unit dividends		(7,788	)		(7,791	)		—			(5,744	)		13,535			(7,788	)
Net income attributable to common unitholders	$	2,832		$	2,829		$	10,620		$	11,436		$	(24,885	)	$	2,832

The fair values of stock option grants are amortized as compensation expense, reduced for estimated forfeitures, on a straight-line basis over the vesting period of the grants. Compensation expense recognized is shown in the operating activities section of the consolidated statements of cash flows. The fair value for these options was estimated at the date of grant using a Black-Scholes option-pricing model.

The Black-Scholes option valuation model was developed for use in estimating the fair value of traded options, which have no vesting restrictions and are fully transferable. In addition, option valuation models require the input of highly subjective assumptions including the expected stock price volatility. Prior to February 10, 2005, Syniverse, Inc.’s common stock was not traded on public markets. Therefore, a volatility of 0% was used in the Black-Scholes option valuation model for options issued prior to our initial public offering. We use average historical volatility for options issued subsequent to our initial public offering.

Option Plans

On May 16, 2002, our Board of Directors adopted a Founders’ Stock Option Plan for non-employee directors, executives and other key employees of Syniverse Inc. In addition, the Board of Directors adopted a Directors’ Stock Option Plan on August 2, 2002, which provided for grants to independent directors to purchase up to 20,000 shares upon election to the board. The plans had a term of five years and provided for the granting of options to purchase shares of Syniverse, Inc.’s non-voting Class B common stock. As part of our initial public offering, we reclassified the Class B common stock into our common stock and hence all of our options now provide for the purchase of our common stock.

Under the plans, the options have an initial exercise price based on the fair value of each share, as determined by the Board. The per share exercise price of each stock option will not be less than the fair market value of the stock on the date of the grant or, in the case of an equity holder owning more than 10% of the outstanding stock of Syniverse, Inc., the price for incentive stock options is not less than 110% of such fair market value. The Board of Syniverse, Inc. reserved 402,400 shares of common stock, par value $.001 per share for issuance under the Founders’ plan and 160,360 shares under the Directors’ plan.

Both the Founder’s Stock Option Plan and the Directors’ Stock Option Plan have expired and the Board of Syniverse, Inc. no longer grants options under these plans. As of June 30, 2009, there were options to purchase 129,333 shares outstanding under the Founder’s Stock Option Plan and options to purchase 100,240 shares outstanding under the Directors’ Stock Option Plan.

All options issued under the plans are presumed to be nonqualified stock options unless otherwise indicated in the option agreement. Each option has an exercisable life of no more than 10 years from the date of grant for both nonqualified and incentive stock options in the case of grants under the Founders’ Stock Option Plan and under the Directors’ Stock Option Plan. Generally, the options under these plans vest 20% after the first year and 5% per quarter thereafter.

2006 Long-Term Equity Incentive Plan

On May 9, 2006, our Board of Directors adopted the 2006 Long-Term Equity Incentive Plan (the Incentive Plan). The Incentive Plan provides incentive compensation through grants of incentive or non-qualified stock options, restricted stock, restricted stock units, stock appreciation rights (SARs), performance awards, or any combination of the foregoing. The Incentive Plan is designed to allow for the grant of long term incentive awards that conform to the requirements for tax deductible “performance based” compensation under Section 162(m) of the Internal Revenue Code of 1986, as amended.

Under the Incentive Plan, 6,000,000 shares of common stock were authorized for issuance, of which 1,000,000 shares may be issued as restricted stock, restricted stock units or performance shares. The number of shares and price per share is determined by the Compensation Committee (the Committee) for those awards granted. However, the exercise price of any option may not be less than 100% of the fair market value of a share of common stock on the date of grant and the exercise price of an incentive option awarded to a person who owns stock constituting more than 10% of Syniverse, Inc.’s voting power may not be less than 110% of the fair market value on the date of grant. Those eligible to participate in the Incentive Plan are limited to directors (including non-employee directors), officers (including non-employee officers) and employees of Syniverse, Inc. and its subsidiaries selected by the Committee, including participants located outside the United States. Determinations made by the Committee under the Incentive Plan need not be uniform and may be made selectively among eligible individuals under the Incentive Plan.

At the 2009 Annual Meeting of Shareholders held on May 8, 2009, the shareholders of Syniverse, Inc. approved the Syniverse Holdings, Inc. Amended and Restated 2006 Long-Term Equity Incentive Plan (the Amended and Restated 2006 Plan). The Amended and Restated 2006 Plan includes 3,000,000 additional shares of the Company’s common stock all of which may be issued as restricted stock and that may be granted thereunder resulting in a total of 9,000,000 shares reserved and available for issuance pursuant to awards granted (or to be granted) under the Amended and Restated 2006 Plan.

~~CONSOLIDATING~~As ~~STATEMENT~~of OFJune 30, ~~CASH~~2009, ~~FLOWS~~there were 2,109,187 options outstanding, vesting 33 1/3% per year, which had been granted to certain directors, executive officers and other employees. As of June 30, 2009, there were 537,280 unvested restricted shares outstanding, vesting 20% per year, which had been granted to certain directors, executive officers and other employees.

~~SIX~~Employee ~~MONTHS~~Stock ~~ENDED~~Purchase ~~JUNE~~Plan ~~30, 2004~~

	SyniverseLLC			SyniverseInc.			Syniverse			SubsidiaryGuarantors			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	11,831		$	11,831		$	11,831		$	28,897		$	(52,559	)	$	11,831
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization including amortization of deferred debt issuance costs		—			—			17,019			8,001			—			25,020
Provision for (recovery of) uncollectible accounts		—			—			4			(13	)		—			(9	)
Deferred income tax expense		—			—			683			3,488			—			4,171
Loss on disposition of property		—			—			58			69			—			127
Income from equity investment		(11,831	)		(16,023	)		(47,552	)		—			75,406			—
Changes in operating assets and liabilities:
Accounts receivable		—			—			(654	)		9,713			(20,225	)		(11,166	)
Other current assets		—			—			104			13			—			117
Accounts payable		—			4,192			(3,043	)		2,884			(2,626	)		1,407
Other current liabilities		(4	)		—			4,870			(252	)		4			4,618
Other assets and liabilities		—			—			(980	)		—			—			(980	)
Net cash provided by (used in) operating activities		(4	)		—			(17,660	)		52,800			—			35,136
Cash flows from investing activities
Capital expenditures		—			—			(2,896	)		(9,239	)		—			(12,135	)
Dividends received from equity investment		—			—			43,565			—			(43,565	)		—
Net cash provided by (used in) investing activities		—			—			40,669			(9,239	)		(43,565	)		(12,135	)
Cash flows from financing activities
Dividends paid		—			—			—			(43,565	)		43,565			—
Principal payments on long-term debt		—			—			(20,100	)		—			—			(20,100	)
Issuance of common units		4			—			—			—			—			4
Net cash provided by (used in) financing activities		4			—			(20,100	)		(43,565	)		43,565			(20,096	)
Effect of exchange rate changes on cash		—			—			(46	)		—			—			(46	)
Net increase (decrease) in cash		—			—			2,863			(4	)		—			2,859
Cash at beginning of period		—			—			8,293			6			—			8,299
Cash at end of period	$	—		$	—		$	11,156		$	2		$	—		$	11,158

On May 9, 2006, our Board of Directors adopted the 2006 Employee Stock Purchase Plan (the “Purchase Plan”). All employees, including Directors who are employees and all employees of any subsidiary, are eligible to participate in any one or more of the offerings to purchase common stock under the Purchase Plan. Eligible employees may purchase a limited number of shares of Syniverse, Inc.’s common stock at 85% of the market value during a series of offering periods. The purchase price is set based on the price on the New York Stock Exchange at the close of either the first or the last trading day of the offering period, whichever is lower. The fair value of shares issued under the Purchase Plan is estimated on the commencement date of each offering period using the Black-Scholes option pricing model.

As of June 30, 2009, approximately 295,823 shares were reserved for future issuance. As of June 30, 2009, there were 142 enrollments under the Purchase Plan.

7. Derivative Instruments and Hedging Activities

On October 6, 2008, we entered into an interest rate swap agreement to hedge $100,000 of our U.S.-denominated term loan under our senior credit facility to manage interest rate risk. The hedge effectively swaps variable rate interest based on 1-month LIBOR to a fixed rate interest thereby reducing our exposure to interest rate fluctuations for the next two years. This agreement involves the receipt of floating rate amounts in exchange for fixed rate interest payments over the life of the agreement without an exchange of the underlying principal amount. The effective date of the swap is October 31, 2008 and the maturity date is October 31, 2010. The fixed rate is 5.26% based on our 2.76% swap rate plus our 2.50% applicable margin.

We have designated the interest rate swap as a cash flow hedge in accordance with SFAS 133. The counterparty to this interest rate swap agreement is a major financial institution, and we do not anticipate nonperformance by this counterparty. Changes in the fair value of the interest rate swap that are effective are recorded in accumulated other comprehensive income (loss). There was no ineffective portion of the swap for the three and six months ended June 30, 2009. As of June 30, 2009, the fair value of our interest rate swap (based on Level 2 inputs) is $2,441, which is recorded in other long-term liabilities in the consolidated balance sheets. Accumulated other comprehensive loss related to the interest rate swap at June 30, 2009 and December 31, 2008 was $2,925 and $2,441, respectively. For the six month period ended June 30, 2009, we recognized other comprehensive gain of $341, net of tax. During the six months ended June 30, 2009, $1,170 was reclassified into earnings as a result of payments on the variable interest associated with the floating debt. Over the next twelve months, we expect to reclassify $2,069 of losses on our interest rate swap from accumulated other comprehensive loss to earnings related to similar payments of variable interest associated with the floating debt.

Net Investment Hedge of a Foreign Operation

We have designated our Euro-denominated portion of our Term Note B as a net investment hedge of certain foreign operations. For the six months ended June 30, 2009, ($422) related to the revaluation of the debt from Euros to US dollars was included as a component of accumulated other comprehensive loss.

8. Fair Value of Financial Instruments

Statement of Financial Accounting Standards No. 157, Fair Value Measurements (SFAS 157) requires disclosure about how fair value is determined for assets and liabilities and establishes a hierarchy for which these assets and liabilities must be grouped, based on significant levels of inputs. The three-tier fair value hierarchy, which prioritizes the inputs used in the valuation methodologies is as follows:

Level 1—Quoted prices for identical assets and liabilities in active markets.

Level 2—Observable inputs other than quoted prices included in Level 1, such as quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

Level 3—Unobservable inputs for the asset or liability.

As of June 30, 2009, we held certain items that are required to be measured at fair value on a recurring basis including an interest rate swap agreement. Cash and cash equivalents, accounts receivable, accounts payable and accrued expenses are reflected in the financial statements at their carrying value, which approximate their fair value due to their short maturity. The following item is measured at fair value on a recurring basis subject to the disclosure requirements of SFAS 157 as of June 30, 2009:


				Fair Value Measurements at Reporting Date Using
	June 30, 2009			Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Liabilities
Interest rate swap	$	(2,441	)	$	—	$	(2,441	)	$	—

~~CONSOLIDATING~~We ~~BALANCE~~have ~~SHEET~~elected to use the income approach to value our interest rate swap, using observable Level 2 market expectations at measurement date and standard valuation techniques to convert future amounts to a single present value amount assuming that participants are motivated, but not compelled to transact.

ASThe OFfair ~~DECEMBER~~value ~~31,~~of ~~2003~~the 7 3/4% senior subordinated notes due 2013 is based upon quoted market prices in inactive markets for similar instruments (Level 2 as defined under SFAS No. 157). The fair value of the Term Note B is based upon quoted market prices in active markets for similar instruments (Level 2 as defined under SFAS No. 157).

	SyniverseLLC			SyniverseInc.			Syniverse			SubsidiaryGuarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash	$	—		$	—		$	8,293		$	6		$	—		$	8,299
Accounts receivable, net of allowances		—			—			29,843			31,768			—			61,611
Accounts receivable - affiliates		43			—			22,728			22,402			(45,173	)		—
Deferred tax assets		—			—			—			369			—			369
Prepaid and other current assets		—			—			5,795			489			—			6,284
Total current assets		43			—			66,659			55,034			(45,173	)		76,563
Property and equipment, net		—			—			13,867			19,681			—			33,548
Capitalized software, net		—			—			55,274			12,379			—			67,653
Deferred costs, net		—			—			14,584			—			—			14,584
Goodwill		—			—			59,861			271,402			—			331,263
Identifiable intangibles, net:
Customer contract, net		—			—			5,880			3,825			—			9,705
Trademark		—			—			327			358			—			685
Customer base, net		—			—			107,820			88,450			—			196,270
Notes receivable-affiliates		—			—			—			401,985			(401,985	)		—
Investment in subsidiaries		213,733			211,748			787,536			—			(1,213,017	)		—
Total assets	$	213,776		$	211,748		$	1,111,808		$	853,114		$	(1,660,175	)	$	730,271
LIABILITIES AND UNITHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—		$	—		$	4,029		$	—		$	—		$	4,029
Accounts payable - affiliates		—			—			—			45,174			(45,174	)		—
Accrued payroll and related benefits		—			—			8,879			2			—			8,881
Accrued interest		—			—			14,136			—			—			14,136
Other accrued liabilities		—			—			17,093			326			—			17,419
Current portion of Term B Loan, net of discount		—			—			33,589			—			—			33,589
Total current liabilities		—			—			77,726			45,502			(45,174	)		78,054
Long-term liabilities:
Deferred taxes		—			—			1,609			18,091			—			19,700
Payable to affiliate		—			—			401,984			—			(401,984	)		—
Subordinated Notes, net of discount		—			—			241,037			—			—			241,037
Term B Loan, net of discount		—			—			174,749			—			—			174,749
Other long-term liabilities		—			—			2,955			—			—			2,955
Total long-term liabilities		—			—			822,334			18,091			(401,984	)		438,441
Unitholders’ equity:
Class A Preferred Units		—			—			—			—			—			—
Class B Preferred Units		252,367			—			—			—			—			252,367
Common Units		120,351			—			—			—			—			120,351
Common Stock		—			99			—			—			(99	)		—
Preferred Stock		—			3			—			—			(3	)		—
Additional paid-in capital		—			370,588			370,690			1,002,256			(1,743,534	)		—
Accumulated deficit		(159,368	)		(159,368	)		(159,368	)		(213,161	)		531,897			(159,368	)
Accumulated other comprehensive income		426			426			426			426			(1,278	)		426
Total unitholders’ equity		213,776			211,748			211,748			789,521			(1,213,017	)		213,776
Total liabilities and unitholders’ equity	$	213,776		$	211,748		$	1,111,808		$	853,114		$	(1,660,175	)	$	730,271

The carrying amounts and fair values of our long-term debt as of June 30, 2009 and December 31, 2008 are as follows:


	June 30, 2009				December 31, 2008
	Carrying Value		Fair Value		Carrying Value		Fair Value
Term Note B	$	336,664	$	313,098	$	338,813	$	304,932

7³/4% senior subordinated notes, due 2013	$	175,000	$	164,500	$	175,000	$	89,250

9. Commitments and Contingencies

10. Debt

On August 9, 2007, we entered into a $464,000 amended and restated credit agreement (the senior credit facility) with Lehman Brothers Inc. and Deutsche Bank Securities Inc. as joint lead arrangers and joint book-running managers, Lehman Commercial Paper Inc., as administrative agent, Deutsche Bank AG New York Branch, as syndication agent, Bear Stearns Corporate Lending Inc. and LaSalle Bank National Association, as co-documentation agents and the lenders from time to time parties thereto. The obligations under the senior credit facility are unconditionally guaranteed by Syniverse, Inc. and all material U.S. domestic subsidiaries of Syniverse Technologies, Inc. (the Guarantors) and are secured by a security interest in substantially all of the tangible and intangible assets of Syniverse Technologies, Inc. and the Guarantors. The obligations under the senior credit facility are also secured by a pledge of the capital stock of Syniverse Technologies, Inc. and its direct and indirect U.S. subsidiaries.

On May 4, 2009, we entered into an Amendment, Waiver, Resignation and Appointment Agreement, or the amendment, with Lehman Commercial Paper Inc., Bank of America, N.A., and certain of the other parties to the senior credit facility. Pursuant to the amendment, Lehman Commercial Paper has resigned as administrative agent and Bank of America has been appointed as successor administrative agent under the senior credit facility. The amendment also provides for other modifications of the senior credit facility including the termination of Lehman Commercial Paper’s commitments under our undrawn revolving credit lines of $28,200 and provides for Bank of America to extend commitments under our undrawn revolving credit lines of $10,000. This modification reduces our revolving credit lines from $62,000 to $43,800.

11. Supplemental Consolidating Financial Information

Syniverse Technologies, Inc.’s (Syniverse) payment obligations under the senior notes are guaranteed by Syniverse Holdings, Inc. (Syniverse, Inc.) and all domestic subsidiaries of Syniverse Holdings, Inc. including Syniverse Brience (collectively, the Guarantors). The results of Syniverse Technologies BV, Syniverse Holdings Limited, Perfect Profits International Limited and Syniverse Technologies Limited Luxembourg S.à r.l. are included as non-guarantors. Such guarantees are full, unconditional and joint and several. The following supplemental financial information sets forth, on an unconsolidated basis, balance sheets, statements of income, and statements of cash flows information for Syniverse Holdings, Inc., the Guarantors and the non-guarantor subsidiaries. The supplemental financial information reflects the investment of Syniverse Holdings, Inc. and Syniverse Technologies, Inc. using the equity method of accounting.

CONSOLIDATING ~~STATEMENT~~BALANCE OFSHEET ~~OPERATIONS~~(UNAUDITED)

~~SIX~~AS ~~MONTHS~~OF ~~ENDED~~ JUNE 30, ~~2003~~2009

	SyniverseLLC			SyniverseInc.			Syniverse			SubsidiaryGuarantors			Eliminations			Consolidated
	SyniverseInc.			Syniverse			SubsidiaryNon-Guarantors			Eliminations			Consolidated
Revenues	$	—		$	—		$	66,485		$	65,303		$	—		$	131,788
ASSETS
Costs and expenses:
Current assets:
Cost of operations		—			—			20,153			33,127			—			53,280
Cash	$	44		$	160,232		$	27,570		$	—		$	187,846
Sales and marketing		—			—			4,768			4,884			—			9,652
Accounts receivable, net of allowances		—			62,919			23,086			—			86,005
General and administrative		—			—			8,015			10,804			—			18,819
Accounts receivable - affiliates		5,373			4,530			459			(10,362	)		—
Provision for uncollectible accounts		—			—			345			411			—			756
Prepaid and other current assets		—			21,956			8,670			—			30,626
Depreciation and amortization		—			—			11,312			6,957			—			18,269
Total current assets		5,417			249,637			59,785			(10,362	)		304,477
Restructuring		—			—			912			929			—			1,841
Property and equipment, net		—			50,843			3,906			—			54,749
		—			—			45,505			57,112			—			102,617
Capitalized software, net		—			42,813			16,939			—			59,752
Operating income		—			—			20,980			8,191			—			29,171
Deferred costs, net		—			8,255			—			—			8,255
Other income (expense), net:
Goodwill		—			364,498			237,090			—			601,588
Income from equity investment		(1,892	)		(1,532	)		26,194			—			(22,770	)		—
Identifiable intangibles, net		—			148,031			51,477			—			199,508
Interest income		—			—			8,626			18,026			(26,263	)		389
Other assets		—			52,510			1,780			(52,589	)		1,701
Interest expense		—			—			(57,331	)		(24	)		26,263			(31,092	)
Investment in subsidiaries		571,614			269,566			—			(841,180	)		—
		(1,892	)		(1,532	)		(22,511	)		18,002			(22,770	)		(30,703	)
Total assets	$	577,031		$	1,186,153		$	370,977		$	(904,131	)	$	1,230,030
Income (loss) before provision for income taxes		(1,892	)		(1,532	)		(1,531	)		26,193			(22,770	)		(1,532	)
LIABILITIES AND STOCKHOLDERS’ EQUITY
Provision for income taxes		—			360			360			9,358			(9,718	)		360
Current liabilities:
Net income (loss)		(1,892	)		(1,892	)		(1,891	)		16,835			(13,052	)		(1,892	)
Accounts payable	$	—		$	9,361		$	2,688		$	—		$	12,049
Preferred unit dividends		(13,938	)		(15,579	)		—			(10,444	)		26,023			(13,938	)
Accounts payable - affiliates		299			—			10,063			(10,362	)		—
Net income (loss) attributable to common unitholders	$	(15,830	)	$	(17,471	)	$	(1,891	)	$	6,391		$	12,971		$	(15,830	)
Accrued payroll and related benefits		248			4,174			2,853			—			7,275
Accrued interest		—			5,177			—			—			5,177
Accrued income taxes		(31	)		343			1,856			—			2,168
Deferred revenues		—			474			3,442			—			3,916
Other accrued liabilities		—			20,930			6,622			—			27,552
Current portion of Term Note B		—			3,427			—			—			3,427
Total current liabilities		516			43,886			27,524			(10,362	)		61,564
Long-term liabilities:
Deferred tax liabilities		—			57,224			16,401			—			73,625
7 3/4% senior subordinated notes due 2013		—			175,000			—			—			175,000
Term Note B, less current maturities		—			333,237			—			—			333,237
Other long-term liabilities		—			5,192			57,486			(52,589	)		10,089
Total liabilities		516			614,539			101,411			(62,951	)		653,515
Stockholders’ equity:
Common stock		68			—			2,120			(2,120	)		68
Additional paid-in capital		474,768			470,863			252,007			(722,870	)		474,768
Retained earnings		115,878			115,878			27,317			(143,195	)		115,878
Accumulated other comprehensive income (loss)		(15,173	)		(15,112	)		(11,878	)		26,990			(15,173	)
Common stock held in treasury, at cost		(15	)		(15	)		—			15			(15	)
Total Syniverse Holdings, Inc. stockholders’ equity		575,526			571,614			269,566			(841,180	)		575,526
Noncontrolling interest		989			—			—			—			989
Total Equity		576,515			571,614			269,566			(841,180	)		576,515
Total liabilities and stockholders’ equity	$	577,031		$	1,186,153		$	370,977		$	(904,131	)	$	1,230,030

CONSOLIDATING STATEMENT OF ~~OPERATIONS~~INCOME (UNAUDITED)

THREE MONTHS ENDED JUNE 30, ~~2003~~2009

	SyniverseLLC			SyniverseInc.			Syniverse			SubsidiaryGuarantors			Eliminations			Consolidated
	SyniverseInc.			Syniverse			SubsidiaryNon-Guarantors			Eliminations			Consolidated
Revenues	$	—		$	—93,989		$	3419,~~601~~489		$	~~32,875~~—		$	—113,478		$	~~67,476~~
Costs and expenses:
Cost of operations		—			—			9,487			17,150			—			26,637
Cost of operations (excluding depreciation and amortization shown separately below)		68			34,362			6,474			—			40,904
Sales and marketing		—456			—4,515			23,~~450~~864			~~2,077~~—			—8,835			~~4,527~~
General and administrative		—1,385			—11,735			3,~~840~~885			~~5,923~~—			—17,005			~~9,763~~
Provision for uncollectible accounts		—			—			162			225			—			387
Depreciation and amortization		—			10,613			3,424			—			14,037
Depreciation and amortization		—			—			5,743			3,536			—			9,279
		1,909			61,225			17,647			—			80,781
Restructuring		—			—			—			—			—			—
Operating income (loss)		(1,909	)		32,764			1,842			—			32,697
		—			—			21,682			28,911			—			50,593
Other income (expense), net:
Operating income		—			—			12,919			3,964			—			16,883
Income from equity investment		17,696			2,270			—			(19,966	)		—
Other income (expense), net:
Interest income		—			746			23			(720	)		49
Income from equity investment		(1,892	)		(1,532	)		17,211			—			(13,787	)		—
Interest expense		—			(7,495	)		(720	)		720			(7,495	)
Interest income		—			—			55			13,271			(13,205	)		121
Other, net		—			122			729			—			851
Interest expense		—			—			(27,079	)		(24	)		13,205			(13,898	)
		17,696			(4,357	)		32			(19,966	)		(6,595	)
		(1,892	)		(1,532	)		(9,813	)		13,247			(13,787	)		(13,777	)
Income before provision for income taxes		15,787			28,407			1,874			(19,966	)		26,102
Income (loss) before provision for income taxes		(1,892	)		(1,532	)		3,106			17,211			(13,787	)		3,106
Provision for income taxes		(691	)		10,711			(396	)		—			9,624
Provision for income taxes		—			360			1,819			6,046			(6,406	)		1,819
Net income		16,478			17,696			2,270			(19,966	)		16,478
Net income (loss)		(1,892	)		(1,892	)		1,287			11,165			(7,381	)		1,287
Less: Net loss attributable to noncontrolling interest		—			(53	)		—			—			(53	)
Preferred unit dividends		(7,056	)		(7,058	)		—			(5,222	)		12,280			(7,056	)
Net income attributable to Syniverse Holdings, Inc.		16,478			17,749			2,270			(19,966	)		16,531
Net income (loss) attributable to common unitholders	$	(8,948	)	$	(8,950	)	$	1,287		$	5,943		$	4,899		$	(5,769	)

CONSOLIDATING STATEMENT OF ~~CASH~~INCOME ~~FLOWS~~(UNAUDITED)

SIX MONTHS ENDED JUNE 30, ~~2003~~2009

	SyniverseLLC			SyniverseInc.			Syniverse			SubsidiaryGuarantors			Eliminations			Consolidated
	SyniverseInc.			Syniverse			SubsidiaryNon-Guarantors			Eliminations			Consolidated
Cash flows from operating activities
Revenues	$	—		$	184,459		$	37,943		$	—		$	222,402
Net income (loss)	$	(1,892	)	$	(1,892	)	$	(1,892	)	$	16,837		$	(13,053	)	$	(1,892	)
Costs and expenses:
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Cost of operations (excluding depreciation and amortization shown separately below)		107			67,703			13,052			—			80,862
Depreciation and amortization including amortization of deferred debt issuance costs		—			—			18,820			6,957			—			25,777
Sales and marketing		680			9,986			6,857			—			17,523
Provision for uncollectible accounts		—			—			345			411			—			756
General and administrative		2,228			24,705			7,070			—			34,003
Deferred income tax (benefit) expense		—			—			(3,029	)		3,824			—			795
Depreciation and amortization		—			21,128			6,493			—			27,621
Income (loss) from equity investment		1,892			1,532			(26,194	)		—			22,770			—
		3,015			123,522			33,472			—			160,009
Changes in current assets and liabilities:
Operating income (loss)		(3,015	)		60,937			4,471			—			62,393
Accounts receivable		—			—			(330	)		3,633			(4,881	)		(1,578	)
Other income (expense), net:
Other current assets		—			—			451			494			—			945
Income from equity investment		34,435			5,901			—			(40,336	)		—
Accounts payable		—			—			(4,419	)		12,123			(4,452	)		3,252
Interest income		—			1,746			158			(1,663	)		241
Other current liabilities		(4	)		360			(549	)		(3,306	)		(362	)		(3,861	)
Interest expense		—			(14,851	)		(1,663	)		1,663			(14,851	)
Other assets and liabilities		—			—			—			1,045			—			1,045
Other, net		—			(139	)		1,273			—			1,134
Net cash provided by (used in) operating activities		(4	)		—			(16,797	)		42,018			22			25,239
		34,435			(7,343	)		(232	)		(40,336	)		(13,476	)
Cash flows from investing activities
Income before provision for income taxes		31,420			53,594			4,239			(40,336	)		48,917
Capital expenditures		—			—			(503	)		(4,709	)		—			(5,212	)
Provision for income taxes		(1,090	)		19,159			(1,662	)		—			16,407
Dividends received from equity investment		—			—			39,610			—			(39,610	)		—
Net income		32,510			34,435			5,901			(40,336	)		32,510
Net cash provided by (used in) investing activities		—			—			39,107			(4,709	)		(39,610	)		(5,212	)
Less: Net loss attributable to noncontrolling interest		—			(53	)		—			—			(53	)
Cash flows from financing activities
Net income attributable to Syniverse Holdings, Inc.		32,510			34,488			5,901			(40,336	)		32,563
Dividends paid		—			—			—			(39,610	)		39,610			—
Retirement of long-term debt		—			—			(52,275	)		—			—			(52,275	)
Issuance of common units		13			—			—			—			—			13
Repurchase of common units		(9	)		—			—			—			—			(9	)
Capital contribution		—			—			—			22			(22	)		—
Net cash provided by (used in) financing activities		4			—			(52,275	)		(39,588	)		39,588			(52,271	)
Net decrease in cash		—			—			(29,965	)		(2,279	)		—			(32,244	)
Cash at beginning of period		—			—			39,576			2,614			—			42,190
Cash at end of period	$	—		$	—		$	9,611		$	335		$	—		$	9,946

~~ITEM~~CONSOLIDATING 2:STATEMENT ~~MANAGEMENT’S DISCUSSION AND ANALYSIS~~ OF ~~FINANCIAL~~CASH ~~CONDITION~~FLOWS ~~AND~~(UNAUDITED) ~~RESULTS OF OPERATIONS~~

~~Executive~~SIX ~~Overview~~MONTHS ENDED JUNE 30, 2009

We are a global communications technology company specializing in innovative business and network engineering solutions that manage and interconnect voice and data systems throughout the world. Our services include transaction-based, network, number portability, technology interoperability, call processing and other outsourcing services that simplify the interconnection and management of complex voice and data networks. We address technology interoperability complexities as the largest clearinghouse in the United States for the billing and settlement of wireless roaming telephone calls, with an estimated market share of approximately 60% in 2003 based on the number of wireless subscribers. We also own one of the largest unaffiliated Signaling System 7 (SS7) networks in the United States. SS7 is the telecommunication industry’s standard network signaling protocol used by nearly all carriers to enable the setup and delivery of wireless and wireline telephone calls. Our network services also allow our customers to access intelligent network services and monitor network performance and subscriber activity on a real-time basis. In addition, we are the industry’s leading developer and provider of call processing solutions that enable seamless regional, national and international wireless roaming telephone service. We are the leading provider of wireless local number portability (WLNP) in the United States, having developed and launched the wireless industry’s only end-to-end solution for wireless carriers. Our full suite of products addresses pre-provisioning of subscribers, intercarrier communication necessary for actual porting to a new carrier, and porting failures, known as fallout. Our solutions are offered as either service bureau or turnkey, providing flexibility for carriers. We have dominant market share for WLNP based on contracts with five of the top six U.S. carriers, representing 92% of the available intercarrier communications service bureau customers, and 70% of the inter-carrier communications clearinghouse market.


	Syniverse Inc.			Syniverse			Subsidiary Non-Guarantors			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	32,510		$	34,435		$	5,901		$	(40,336	)	$	32,510
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization including amortization of deferred debt issuance costs		—			21,988			6,493			—			28,481
Provision for uncollectible accounts		—			285			71			—			356
Deferred income tax benefit (expense)		—			5,825			(221	)		—			5,604
Income from equity investment		(34,435	)		(5,901	)		—			40,336			—
Stock-based compensation		3,015			—			—			—			3,015
Other, net		—			61			5			—			66
Changes in operating assets and liabilities, net of acquisition:
Accounts receivable		—			(2,794	)		6,114			—			3,320
Other current assets		—			(11,171	)		1,545			—			(9,626	)
Accounts payable, accrued payroll and related benefits		—			(1,747	)		(6,220	)		—			(7,967	)
Other current liabilities		(1,090	)		2,248			(9,104	)		—			(7,946	)
Other assets and liabilities		(244	)		(2,446	)		5,151			—			2,461

Net cash provided by (used in) operating activities		(244	)		40,783			9,735			—			50,274


Cash flows from investing activities
Capital expenditures		—			(18,784	)		(2,152	)		—			(20,936	)
Acquisition of Wireless Solutions International, net of acquired cash		—			(3,182	)		—			—			(3,182	)

Net cash used in investing activities		—			(21,966	)		(2,152	)		—			(24,118	)


Cash flows from financing activities
Principal payments on senior credit facility		—			(1,705	)		—			—			(1,705	)
Principal payments on Highwoods note		—			25,626			(25,626	)		—			—
Issuances of stock under employee stock purchase plan		415			—			—			—			415
Issuance of stock for stock options exercised		95			—			—			—			95
Minimum tax withholding on restricted stock awards		(266	)		—			—			—			(266	)
Capital contribution from noncontrolling interest in a joint venture		—			(792	)		1,773			—			981

Net cash provided by (used in) financing activities		244			23,129			(23,853	)		—			(480	)


Effect of exchange rate changes on cash		—			(628	)		(2,807	)		—			(3,435	)

Net increase in cash		—			41,318			(19,077	)		—			22,241
Cash at beginning of period		44			118,914			46,647			—			165,605

Cash at end of period	$	44		$	160,232		$	27,570		$	—		$	187,846

On February 14, 2002, Syniverse Holdings, Inc. acquired Syniverse Technologies, Inc. by merging its wholly owned subsidiary, TSI Merger Sub, Inc., with and into Syniverse Technologies, Inc. Syniverse Holdings, Inc. is wholly owned by Syniverse Holdings, LLC. Syniverse Holdings, LLC and Syniverse Holdings, Inc. have no operations other than their ownership of their direct and indirect subsidiaries.

On July 23, 2003, Syniverse Networks, Inc. acquired Brience, Inc. (Brience) by issuing 100,000 common units of Syniverse Holdings, LLC and merging Brience with and into Syniverse Brience, LLC (Syniverse Brience), a newly formed wholly owned subsidiary of Syniverse Networks, Inc., with Syniverse Brience continuing as the surviving entity and a wholly owned subsidiary of Syniverse Networks, Inc.

At the time of the Brience merger, funds associated with GTCR Golder Rauner, LLC had a controlling interest in both Brience and Syniverse Holdings, LLC. As a result, the transaction was accounted for as a combination of entities under common control, similar to a pooling of interests, whereby the assets and liabilities of Brience were combined at their historical amounts as of the date that GTCR Golder Rauner, LLC had control of both entities (February 14, 2002). For historical accounting purposes, the historical financial results of Brience have only been combined for the periods during which Syniverse Holdings, LLC and Brience were under common control of funds associated with GTCR Golder Rauner, LLC. Accordingly, our historical consolidated financial statements since February 14, 2002 include the financial results of Brience beginning on the date when funds associated with GTCR Golder Rauner, LLC had common control of both entities (February 14, 2002).

On December 19, 2003, Syniverse Technologies, Inc. acquired all the outstanding shares of Syniverse Holdings Limited (Syniverse Holdings) for $0.8 million cash and the assumption of liabilities of $1.3 million. The acquisition was accounted for using the purchase method of accounting, and hence the results of operations of Syniverse Holdings have been included since December 19, 2003.

Introduction

We provide a diverse set of services to meet the evolving requirements of the telecommunications industry. Our services are categorized into the following groups:

• Network Services - We provide our customers with connectivity to our SS7 network and other widely used communications networks (e.g., X.25, Frame Relay and IP). SS7 is the telecommunication industry’s standard network signaling protocol used by almost every carrier in North America to enable the setup and delivery of wireless and wireline telephone calls. A telephone call has two components: the call content (e.g., voice, video or data) and the signaling information (e.g., caller information, number called and subscriber validation). SS7 is the transport network for this signaling information. We also provide Web-based analysis and reporting services, allowing our customers to access real-time subscriber activity, monitor their networks, troubleshoot customer care issues and handle network management tasks seamlessly. In addition, use of our SS7 network facilitates access to intelligent network services, such as local number portability (LNP), line information database (LIDB), toll-free

~~database~~CONSOLIDATING ~~and~~BALANCE ~~Caller~~SHEET ID. Our primary services in this group are INLink, Visibility, the SS7 Database Access services, Inpack, and CCNS. We also offer software and services that enable secure application and mobile data communication across multiple devices, software platforms, and networks. Mobile Processing Server (MPS) is an integrated software design and development environment for building mobile solutions that provide a compelling user experience across multiple device form factors ranging from cell phones to PDAs.

•AS ~~Number~~OF ~~Porting~~DECEMBER Services - The Telecommunications Act of 1996 mandates number portability as a means to promote competition for phone service. Number portability means that a subscriber can switch telephone service providers but retain the existing telephone number. Wireline carriers in the largest markets have offered number portability since 1998. After numerous delays and postponements31, ~~wireless~~2008 carriers in the top 100 markets were required to offer wireless local number portability as of November 24, 2003. The implementation of WLNP fundamentally changed the way the wireless industry identifies phone numbers and routes calls. Additionally, porting a number from one carrier to another is an exceedingly complex process that minimally requires eleven “transactions” or exchanges of information between carriers and between carriers and the Number Portability Administration Center (NPAC). Furthermore, the method for porting a wireline number to a wireless phone is not standardized. We developed the industry’s only end-to-end, fully integrated suite of services to enable wireless carriers to meet the FCC-mandated November 2003 deadline for WLNP. Our suite of WLNP services address inter-carrier communication, communication with the NPAC and system and help desk troubleshooting that is necessary when ports fail, known as “fallout.” Our specific services include Pre-Port Validation, Inter-carrier Communication (ICC) Service Order Activation (SOA) Service Bureau, ICC Clearinghouse, Wireline-to-Wireless Porting, Fallout Management/Port Center, and Workflow Management. Similarly, we have contracts to provide the same WLNP services to other carriers to meet the May 2004 deadlines for the secondary and tertiary markets.

• Technology Interoperability Services - We address technology interoperability complexities by acting as the primary point of contact for hundreds of wireless carriers for the processing of roaming billing and short message service (SMS) transactions across substantially all network, signaling, billing and messaging standards. Our clearinghouse services have established us as the trusted third-party for the collection, translation and exchange of proprietary subscriber billing data and messages between carriers on a secure, confidential and timely basis. Our primary services in this group are ACCESS, ACCESS S&E, UniRoam, Access Revenue Management and Message Management.


	Syniverse Inc.			Syniverse			Subsidiary Non-Guarantors			Eliminations			Consolidated
ASSETS
Current assets:
Cash	$	44		$	118,914		$	46,647		$	—		$	165,605
Accounts receivable, net of allowances		—			66,208			22,574			—			88,782
Accounts receivable - affiliates		5,122			8,004			4,448			(17,574	)		—
Prepaid and other current assets		—			10,146			10,825			—			20,971

Total current assets		5,166			203,272			84,494			(17,574	)		275,358

Property and equipment, net		—			47,277			2,974			—			50,251
Capitalized software, net		—			42,178			18,006			—			60,184
Deferred costs, net		—			7,288			—			—			7,288
Goodwill		—			361,318			235,344			—			596,662
Identifiable intangibles, net		—			153,833			54,685			—			208,518
Other assets		—			82,970			1,324			(82,721	)		1,573
Investment in subsidiaries		531,184			256,988			—			(788,172	)		—

Total assets	$	536,350		$	1,155,124		$	396,827		$	(888,467	)	$	1,199,834


LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	—		$	3,272		$	4,039		$	—		$	7,311
Accounts payable - affiliates		298			—			16,858			(17,156	)		—
Accrued payroll and related benefits		241			16,694			3,176			—			20,111
Accrued interest		—			5,160			418			(418	)		5,160
Accrued income taxes		(31	)		9,865			57			—			9,891
Deferred revenues		—			802			3,458			—			4,260
Other accrued liabilities		—			19,095			9,880			—			28,975
Current portion of Term Note B		—			3,431			—			—			3,431

Total current liabilities		508			58,319			37,886			(17,574	)		79,139

Long-term liabilities:
Deferred tax liabilities		—			51,136			14,410			—			65,546
7³/4% senior subordinated notes due 2013		—			175,000			—			—			175,000
Term Note B, less current maturities		—			335,382			—			—			335,382
Other long-term liabilities		—			4,103			87,543			(82,721	)		8,925

Total liabilities		—			623,940			139,839			(100,295	)		663,992

Stockholders’ equity:
Common stock		68			—			115			(115	)		68
Additional paid-in capital		471,524			466,934			248,481			(715,415	)		471,524
Retained earnings		83,315			83,315			27,860			(111,175	)		83,315
Accumulated other comprehensive income (loss)		(19,035	)		(19,035	)		(19,468	)		38,503			(19,035	)
Common stock held in treasury, at cost		(30	)		(30	)		—			30			(30	)

Total Syniverse Holdings, Inc. stockholders’ equity		535,842			531,184			256,988			(788,172	)		535,842

Total liabilities and stockholders’ equity	$	536,350		$	1,155,124		$	396,827		$	(888,467	)	$	1,199,834

• Call Processing Services - We offer telecommunication carriers comprehensive call processing services that employ advanced technologies to provide subscriber verification, call delivery and technical fraud detection and prevention regardless of switch type, billing format or signaling standard. These services support seamless regional, national and international telephone roaming service for wireless subscribers. Our primary services in this group are FraudManager, Follow Me Roaming Plus, Key Management Center and FraudX.

• Other Outsourcing Services - We provide other value-added outsourcing services including a telematics solution that enables trucking and distribution companies to track vehicle location and improve fleet utilization and outsourced services that enhance carriers’ ability to manage and consolidate billing for their enterprise customer accounts. Our primary services in this group are STREAMLINER and Fleet-On-Track.

Revenues

Our revenues are primarily derived from the sale of our Network Services, Number Porting Services, Technology Interoperability Services and Call Processing Services to telecommunication providers throughout the world. To a lesser extent, we also generate revenues from Other Outsourcing Services. In order to encourage greater usage, we negotiate tiered pricing schedules with our customers based on certain established transaction volume levels. As a result, we expect the average price per transaction for many of our products to decline as customers increasingly use our services.

We believe there is minimal seasonality in our business. However, there is generally a slight increase in wireless roaming telephone usage traffic and corresponding revenues in the high-travel months of the second and third fiscal quarters.

• Network Services primarily generate revenue by charging per-transaction processing fees, circuit fees and port fees. The monthly SS7 connection fee is based on the number of links as well as the number of switches to which a customer signals. The per-transaction fees are based on the number of subscriber events and database queries made through our network and are recognized as revenues at the time the transactions are performed. Syniverse Brience’s software revenues are generated through license fees, maintenance agreements and professional services. License fee revenues consist principally of revenue from the licensing of our software. Revenue is recognized from software license fees on a straight-line basis over the period beginning with the completion of

~~implementation~~CONSOLIDATING ~~and~~STATEMENT ~~customer~~OF ~~acceptance~~INCOME ~~and~~(UNAUDITED) ending with the conclusion of the first maintenance period. Maintenance agreements call for us to provide technical support and software enhancements to customers. Revenue on technical support and software enhancement rights is recognized ratably over the term of the support agreement. Professional services include consulting, training and installation services to our customers. Revenue from such services is generally recognized on a straight-line basis over the same period as the software license fee.

•THREE ~~Number~~MONTHS ~~Porting~~ENDED ~~Services~~JUNE ~~primarily generate revenues by charging per-transaction processing fees~~30, ~~monthly~~2008 fixed fees, and fees for customer implementations. We defer revenues related to customer implementations, and recognize these fees on a straight-line basis over the life of the initial customer agreements. We recognize processing revenues at the time the transactions and services are performed.

• Technology Interoperability Services primarily generate revenues by charging per-transaction processing fees. For our wireless roaming, wireline and SMS clearinghouse services, revenues vary based on the number of data/messaging records provided to us by telecommunications carriers for aggregation, translation and distribution among carriers. These records are based on the number of wireless roaming subscriber telephone calls and messages that take place on our customers’ networks. We recognize revenues at the time the transactions are performed.


	Syniverse Inc.			Syniverse			Subsidiary Non-Guarantors			Eliminations			Consolidated
Revenues	$	—		$	102,013		$	25,606		$	—		$	127,619


Costs and expenses:
Cost of operations (excluding depreciation and amortization shown separately below)		74			34,067			7,448			—			41,589
Sales and marketing		353			7,646			4,201			—			12,200
General and administrative		920			15,616			3,332			—			19,868
Depreciation and amortization		—			10,314			3,477			—			13,791

		1,347			67,643			18,458			—			87,448


Operating income (loss)		(1,347	)		34,370			7,148			—			40,171

Other income (expense), net:
Income from equity investment		21,236			6,014			—			(27,250	)		—
Interest income		1			178			303			—			482
Interest expense		—			(9,407	)		—			—			(9,407	)
Other, net		—			(48	)		(224	)		—			(272	)

		21,237			(3,263	)		79			(27,250	)		(9,197	)


Income before provision for income taxes		19,890			31,107			7,227			(27,250	)		30,974

Provision for income taxes		(462	)		9,871			1,213			—			10,622


Net income		20,352			21,236			6,014			(27,250	)		20,352

• Call Processing Services primarily generate revenue by charging per-transaction processing fees and software licensing fees. The per-transaction fee is based on the number of validation, authorization, and other call processing messages generated by wireless subscribers and is recognized as revenues at the time the transactions are performed. We also provide turnkey software solutions for which we charge customers a software licensing fee. For turnkey software, we recognize revenue when accepted by the customer.

• Other Outsourcing Services primarily generate revenue by charging per-subscriber fees. We recognize revenues at the time the service is performed.

Costs and Expenses

Our costs and expenses consist of cost of operations, sales and marketing, general and administrative, and depreciation and amortization.

• Cost of operations includes processing costs, network costs, royalty costs, personnel costs associated with service implementation, training and customer care, and off-network database query charges.

• Sales and marketing includes personnel costs, advertising costs, trade show costs and relationship marketing costs.

• General and administrative consists primarily of research and development expenses, a portion of the expenses associated with our facilities, internal management expenses, business development expenses, and expenses for finance, legal, human resources and other administrative departments. In addition, we incur significant service development costs. These costs, which are primarily personnel, relate to technology creation, enhancement and maintenance of new and existing services. Historically, most of these costs are expensed and recorded as general and administrative expenses. The capitalized portion, which is recorded as capitalized software costs, relates to costs incurred during the application development stage for the new service offerings and significant service enhancements.

• Depreciation and amortization relates primarily to our property and equipment including SS7 network and our intangible assets including capitalized software and infrastructure facilities related to information management, research and development and customer care. Beginning in 2004, we also began recognizing amortization expense related to certain intangible assets established as part of our purchase accounting for Syniverse Holdings.

~~Results~~CONSOLIDATING ofSTATEMENT ~~Operations~~OF INCOME (UNAUDITED)

~~The~~SIX ~~following~~MONTHS ~~table~~ENDED ~~presents~~JUNE ~~an overview of our results of operations for the three and six months ended June~~ 30, ~~2004~~2008 ~~and the three and six months ended June 30, 2003:~~

	Three MonthsEnded June 30, 2004			% ofRevenues			Three MonthsEnded June 30, 2003				% ofRevenues			2004 vs. 2003 Change
	SyniverseInc.			Syniverse				SubsidiaryNon-Guarantors				Eliminations				Consolidated
														$				%
Revenues	$	—		$	195,461			$	47,803			$	—			$	243,264
Revenues:
Costs and expenses:
Off-Network Database Query Fees	$	8,065		9.5	%		$	8,139			12.0	%		$	(74	)		(0.9	)%
Cost of operations (excluding depreciation and amortization shown separately below)		81			64,956				14,530				—				79,567
Other Network Services		34,857		41.0	%			26,973			40.0	%			7,884			29.2	%
Sales and marketing		617			14,579				7,758				—				22,954
Total Network Services		42,922		50.5	%			35,112			52.0	%			7,810			22.2	%
General and administrative		1,726			29,545				6,739				—				38,010
Number Porting Services		11,772		13.9	%			461			0.7	%			11,311			2453.6	%
Depreciation and amortization		—			20,513				6,911				—				27,424
Technology Interoperability Services		18,309		21.5	%			17,073			25.3	%			1,236			7.2	%
Restructuring		—			17				—								17
Call Processing Services		8,242		9.7	%			11,147			16.5	%			(2,905	)		(26.1	)%
		2,424			129,610				35,938				—				167,972
Other Outsourcing Services		3,696		4.4	%			3,683			5.5	%			13			0.4	%
Operating income (loss)		(2,424	)		65,851				11,865				—				75,292
Total revenues		84,941		100.0	%			67,476			100.0	%			17,465			25.9	%
Other income (expense), net:
Costs and expenses:
Income from equity investment		37,268			10,635				—				(47,903	)			—
Cost of operations		36,271		42.8	%			26,637			39.4	%			9,634			36.2	%
Interest income		2			311				599				—				912
Sales and marketing		5,169		6.1	%			4,527			6.7	%			642			14.2	%
Interest expense		—			(19,127	)			—				—				(19,127	)
General and administrative		8,904		10.5	%			9,763			14.5	%			(859	)		(8.8	)%
Other, net		—			(104	)			(111	)			—				(215	)
Provision for (recovery of) uncollectible accounts		(257	)	(0.3	)%			387			0.6	%			(644	)		(166.4	)%
		37,270			(8,285	)			488				(47,903	)			(18,430	)
Depreciation and amortization		9,891		11.6	%			9,279			13.8	%			612			6.6	%
Income before provision for income taxes		34,846			57,566				12,353				(47,903	)			56,862
Restructuring		289		0.3	%			—			0.0	%			289			100.0	%
Provision for income taxes		(899	)		20,298				1,718				—				21,117
		60,267		71.0	%			50,593			75.0	%			9,674			19.1	%
Net income		35,745			37,268				10,635				(47,903	)			35,745
Operating income		24,674		29.0	%			16,883			25.0	%			7,791			46.1	%
Other income (expense), net:
Interest income		427		0.6	%			121			0.2	%			306			252.9	%
Interest expense		(12,393	)	(14.6	)%			(13,898	)		(20.6	)%			1,505			(10.8	)%
		(11,966	)	(14.0	)%			(13,777	)		(20.4	)%			1,811			(13.1	)%
Income before provision for income taxes		12,708		15.0	%			3,106			4.6	%			9,602			309.1	%
Provision for income taxes		2,088		2.5	%			1,819			2.7	%			269			14.8	%
Net income		10,620		12.5	%			1,287			1.9	%			9,333			725.2	%
Preferred unit dividends		(7,788	)	(9.2	)%			(7,056	)		(10.4	)%			(732	)		10.4	%
Net income (loss) attributable to common unitholders	$	2,832		3.3	%		$	(5,769	)		(8.5	)%		$	8,601			(149.1	)%

	Six Months Ended June 30, 2004			% ofRevenues		Six MonthsEndedJune 30, 2003			% ofRevenues		2004 vs. 2003 Change
											$			%
Revenues:
Off-Network Database Query Fees	$	15,477		9.6	%	$	16,177		12.3	%	$	(700	)	(4.3	)%
Other Network Services		64,668		40.0	%		54,353		41.2	%		10,315		19.0	%
Total Network Services		80,145		49.6	%		70,530		53.5	%		9,615		13.6	%
Number Porting Services		22,903		14.2	%		735		0.6	%		22,168		3016.1	%
Technology Interoperability Services		33,588		20.7	%		31,617		23.9	%		1,971		6.2	%
Call Processing Services		17,554		10.9	%		21,325		16.2	%		(3,771	)	(17.7	)%
Other Outsourcing Services		7,421		4.6	%		7,581		5.8	%		(160	)	(2.1	)%
Total revenues		161,611		100.0	%		131,788		100.0	%		29,823		22.6	%
Costs and expenses:
Cost of operations		71,426		44.2	%		53,280		40.4	%		18,146		34.1	%
Sales and marketing		10,444		6.5	%		9,652		7.3	%		792		8.2	%
General and administrative		17,525		10.8	%		18,819		14.3	%		(1,294	)	(6.9	)%
Provision for (recovery of) uncollectible accounts		(9	)	(0.0	)%		756		0.6	%		(765	)	(101.2	)%
Depreciation and amortization		20,181		12.5	%		18,269		13.9	%		1,912		10.5	%
Restructuring		289		0.2	%		1,841		1.4	%		(1,552	)	(84.3	)%
		119,856		74.2	%		102,617		77.9	%		17,239		16.8	%
Operating income		41,755		25.8	%		29,171		22.1	%		12,584		43.1	%
Other income (expense), net:
Interest income		598		0.4	%		389		0.3	%		209		53.7	%
Interest expense		(26,324	)	(16.3	)%		(31,092	)	(23.6	)%		4,768		(15.3	)%
Other, net		(6	)	(0.0	)%		—		0.0	%		(6	)	100.0	%
		(25,732	)	(15.9	)%		(30,703	)	(23.3	)%		4,971		(16.2	)%
Income (loss) before provision for income taxes		16,023		9.9	%		(1,532	)	(1.2	)%		17,555		(1145.9	)%
Provision for income taxes		4,192		2.6	%		360		0.2	%		3,832		1064.4	%
Net income (loss)		11,831		7.3	%		(1,892	)	(1.4	)%		13,723		(725.3	)%
Preferred unit dividends		(15,386	)	(9.5	)%		(13,938	)	(10.6	)%		(1,448	)	10.4	%
Net (loss) attributable to common unitholders	$	(3,555	)	(2.2	)%	$	(15,830	)	(12.0	)%	$	12,275		(77.5	)%

CONSOLIDATING STATEMENT OF CASH FLOWS (UNAUDITED)

~~Comparison~~SIX ofMONTHS ~~the~~ENDED ~~three~~JUNE ~~and six months ended June~~ 30, ~~2004~~2008 ~~and 2003~~

The historical financial results of Brience, from February 14, 2002, which is the date that GTCR Fund VII, L.P. and its affiliates possessed common control of us and Brience, through July 23, 2003, which is the date that we acquired Brience, are included in our financial results for the applicable periods because this acquisition was accounted for as a combination of entities under common control, similar to a pooling of interests.


	Syniverse Inc.			Syniverse			Subsidiary Non-Guarantors			Eliminations			Consolidated
Cash flows from operating activities
Net income	$	35,745		$	37,268		$	10,635		$	(47,903	)	$	35,745
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization including amortization of deferred debt issuance costs		—			21,520			6,789			—			28,309
Recovery of uncollectible accounts		—			(153	)		—			—			(153	)
Deferred income tax expense		—			14,045			(54	)		—			13,991
Income from equity investment		(37,268	)		(10,635	)		—			47,903			—
Stock-based compensation		2,424			—			—			—			2,424
Other, net		—			18			—			—			18
Changes in operating assets and liabilities, net of acquisition:														—
Accounts receivable		—			(10,175	)		(3,591	)		—			(13,766	)
Other current assets		—			(2,072	)		(1,194	)		—			(3,266	)
Accounts payable, accrued payroll and related benefits		—			(1,664	)		3,760			—			2,096
Other current liabilities		(899	)		7,482			(7,729	)		—			(1,146	)
Other assets and liabilities		(1,351	)		(52	)		1,277			—			(126	)

Net cash provided by (used in) operating activities		(1,349	)		55,582			9,893			—			64,126


Cash flows from investing activities
Capital expenditures		—			(16,070	)		(4,291	)		—			(20,361	)
Acquisition of BSG Wireless, net of acquired cash		—			(823	)		—			—			(823	)

Net cash used in investing activities		—			(16,893	)		(4,291	)		—			(21,184	)


Cash flows from financing activities
Principal Payments on senior credit facility					(1,786	)								(1,786	)
Issuances of stock under employee stock purchase plan		388			—			—			—			388
Issuance of stock for stock options exercised		1,391			—			—			—			1,391
Minimum tax withholding on restricted stock awards		(429	)		—			—			—			(429	)
Purchase of treasury stock		(1	)		—			—			—			(1	)

Net cash provided by (used in) financing activities		1,349			(1,786	)		—			—			(437	)


Effect of exchange rate changes on cash		—			(1	)		1,185			—			1,184


Net increase in cash		—			36,902			6,787			—			43,689
Cash at beginning of period		43			15,121			33,922			—			49,086


Cash at end of period	$	43		$	52,023		$	40,709		$	—		$	92,775

Total revenues increased $17.4 million to $84.9 million for the three months ended June 30, 2004 from $67.5 million for the same period in 2003. Total revenues increased $29.8 million to $161.6 million for the six months ended June 30, 2004 from $131.8 million for the same period in 2003. The increase in revenues was primarily due to the November 24, 2003 service introduction of our WLNP products and increases in our network transport product and other SS7 services.

~~Network~~ITEM Services revenues increased $7.8 million to $42.9 million (including $8.1 million of Off-Network Database Query Fees) for the three months ended June 30, 2004 from $35.1 million (including $8.1 million of Off-Network Database Query Fees) for the same period in 2003. Network Services revenues increased $9.6 million to $80.1 million (including $15.5 million of Off-Network Database Query Fees) for the six months ended June 30, 2004 from $70.5 million (including $16.2: ~~million~~MANAGEMENT’S ofDISCUSSION ~~Off-Network~~AND ~~Database~~ANALYSIS ~~Query~~OF ~~Fees)~~FINANCIAL ~~for~~CONDITION ~~the~~AND ~~same~~RESULTS ~~period~~OF in 2003. The increase in revenues was primarily due to increases in sales of our network transport product and other SS7 services as well as a reduction in our credit memo reserve resulting from a favorable resolution associated with a specific customer. These were offset by lower Visibility Services volumes OPERATIONS

~~Number~~Forward-Looking ~~Porting~~Statements Services revenues increased $11.3 million to $11.8 million for the three months ended June 30, 2004 from $0.5 million for the same period in 2003. Number Porting Services revenues increased $22.2 million to $22.9 million for the six months ended June 30, 2004 from $0.7 million for the same period in 2003. Number Porting Services includes wireless number pooling, porting and amortization of deferred implementation fees. The increase in revenues was due to the November 24, 2003 service introduction of our WLNP products.

~~Technology~~We ~~Interoperability~~have ~~Services~~made ~~revenues~~forward-looking ~~increased~~statements ~~$1.2 million~~within tothe ~~$18.3~~meaning ~~million~~of Section 27A ~~for~~of the ~~three~~Securities ~~months~~Act ~~ended~~of ~~June~~1933, 30as amended, ~~2004~~and ~~from~~Section 21E ~~$17.1~~of ~~million~~the ~~for~~Securities Exchange Act of 1934, as amended (the ~~same~~“Exchange ~~period~~Act”), in ~~2003~~this report. ~~Technology~~The ~~Interoperability~~words ~~Services~~“believes,” ~~revenues~~“anticipates,” “plans,” ~~increased~~“expects,” ~~$2.0~~“intends,” ~~million~~“estimates,” “seeks,” “may” and similar expressions are intended to ~~$33.6~~identify ~~million~~forward-looking ~~for~~statements. ~~the~~These ~~six~~forward-looking ~~months~~statements ~~ended~~involve ~~June~~known 30and unknown risks, ~~2004~~uncertainties ~~from~~and ~~$31.6 million~~other ~~for~~factors ~~the~~that ~~same~~could ~~period~~cause inour ~~2003.~~actual ~~The~~results, ~~increase~~performance inand ~~revenues~~achievements, ~~was~~or ~~primarily~~industry ~~due~~results, to ~~higher~~differ ~~volumes~~materially from ~~our~~any ~~Access~~future ~~and~~results, ~~Access~~performance ~~S&E~~or ~~products~~achievements expressed or implied by such forward-looking statements. Some of the risks, uncertainties and other important factors that may affect future results include, among others:

~~Call~~• ~~Processing~~expectations ~~Services~~of ~~revenues~~growth ~~decreased~~of ~~$2.9 million to $8.2 million for~~ the ~~three~~global ~~months~~wireless ~~ended~~telecommunications ~~June 30~~industry, ~~2004~~including ~~from~~increases ~~$11.1 million for the same period~~ in ~~2003.~~wireless ~~Call~~subscribers, ~~Processing~~wireless ~~Services revenues decreased $3.7 million to $17.6 million for the six months ended June 30~~usage, 2004 from $21.3 million for the same period in 2003. The decrease was due to the expected lifecycle migration by carriers who are moving off our call processing platform to implement SS7 connections between their own networks and their roaming, ~~partners’~~mobile ~~networks. We expect this migration to be accelerated by the complexities associated with WLNP~~data, ~~which~~number ~~requires~~portability ~~carriers to~~and ~~use more advanced technology.~~ messaging;

~~Other~~• ~~Outsourcing~~increases ~~Services revenues~~in ~~were~~demand ~~$3.7 million~~ for ~~the~~our ~~three~~services ~~months~~due ~~ended June 30, 2004 and $3.7 million for the same period in 2003. Other Outsourcing Services revenues decreased $0.2 million~~ to ~~$7.4~~growth ~~million~~of ~~for~~ the ~~six~~global ~~months~~wireless ~~ended~~telecommunications ~~June 30~~industry, ~~2004~~greater ~~from~~technology ~~$7.6~~complexity ~~million~~and ~~for~~ the ~~same~~introduction ~~period~~of innew ~~2003.~~and ~~The~~incompatible ~~decrease in revenues was primarily due to a customer migrating off our prepaid~~ wireless ~~solution.~~ technologies;

~~Cost~~• ~~of operations increased $9.7 million to $36.3 million for~~ the ~~three~~effect ~~months ended June 30, 2004 from $26.6 million for the same period in 2003. Cost~~ of ~~operations increased $18.1 million to $71.4 million for~~ the ~~six~~current ~~months~~economic ~~ended~~downturn ~~June~~on ~~30,~~our ~~2004~~business ~~from~~including ~~$53.3 million for the same period in 2003. The increase was primarily due to increased operational costs related to~~ our ~~new~~2009 ~~WLNP~~revenue ~~products.~~and net income;

~~Sales~~• ~~and marketing expenses increased $0.7 million to $5.2 million for~~ the ~~three~~sufficiency ~~months~~of ~~ended~~our ~~June~~cash 30on hand, ~~2004~~cash available from ~~$4.5~~operations ~~million for the same period in 2003. Sales~~ and ~~marketing~~cash ~~expenses~~available ~~increased $0.7 million to $10.4 million for the six months ended June 30, 2004~~ from ~~$9.7~~our ~~million~~revolving ~~for~~line ~~the~~of ~~same~~credit ~~period in 2003. The increase was due~~ to ~~expenses~~fund ~~related~~our tooperations, ~~the~~debt ~~Syniverse~~service ~~name change offset by lower headcount~~ and ~~employee-related~~capital ~~expenses within the sales and marketing organization resulting from the February 2003 reductions in the workforce.~~ expenditures;

~~General~~• ~~and administrative expenses decreased $0.9 million to $8.9 million for~~ the ~~three~~failure ~~months ended June 30, 2004 from $9.8 million for the same period in 2003. General and administrative expenses decreased $1.3 million~~ to ~~$17.5~~adapt ~~million for the six months ended June 30, 2004 from $18.8 million for the same period in 2003. The decrease was primarily due~~ to ~~lower~~rapid ~~development~~technological ~~expenses,~~changes ~~and the February 2003 reductions~~ in ~~our workforce offset by~~ the ~~inclusion~~telecommunications ~~of historical Brience results.~~ industry;

~~Provision~~• ~~for~~the ~~(recovery~~impact of) ~~uncollectible~~intense ~~accounts~~competition ~~decreased $0.7 million to $(0.3) million for the three months ended June 30, 2004 from $0.4 million for the same period~~ in ~~2003.~~our ~~Provision~~market for ~~(recovery of) uncollectible accounts decreased $0.8 million to $0.0 million for the six months ended June 30~~services, ~~2004~~including ~~from $0.8 million for~~ the ~~same~~possible ~~period~~reduction in ~~2003. The decrease was due to decreases for certain accounts and decreases in~~ the ~~general~~price ~~reserve due to a lower number~~ of ~~customer~~our ~~bankruptcies.~~ services;

~~Depreciation~~• ~~and amortization expenses increased $0.6 million to $9.9 million for~~ the ~~three~~difficulties ~~months~~of ~~ended~~successfully ~~June~~integrating 30, 2004 from $9.3 million for the same period in 2003. Depreciation and amortization expenses increased $1.9 million to $20.2 million for the six months ended June 30, 2004 from $18.3 million for the same period in 2003. The increase was due primarily to higher depreciation and amortization expenses related to our ~~investments~~operations inwith ~~WLNP and our SS7 network expansion in 2003 and $0.7 million of amortization for~~ the ~~remaining~~BSG ~~trademark~~Wireless ~~intangible asset related to our prior name.~~ operations;

~~Restructuring~~• ~~expenses increased $0.3 million to $0.3 million for~~ the ~~three months~~impact ~~ended~~of ~~June 30, 2004 from $0.0 million for~~ the ~~same~~combination ~~period~~of inVerizon ~~2003.~~Wireless ~~Restructuring~~and ~~expenses~~Alltel ~~decreased $1.5 million to $0.3 million for the six months ended June 30, 2004 from $1.8 million for the same period in 2003. On April 20, 2004, we completed a restructuring plan in connection with our~~ Corporation;

•

the impact of new products;

•

uncertain results from our continued expansion into international markets;

•

our stock price volatility and volatility in the market generally;

•

changes in accounting policies and procedures;

•

customer migrations from our services to in-house solutions;

•

fluctuations in currency exchange rates; and

•

other risks and uncertainties described herein, as well as those risks and uncertainties discussed from time to time in our other reports and other public filings with the Securities and Exchange Commission (the “SEC”).

Although we presently believe that the plans, expectations and results expressed in or suggested by the forward-looking statements are reasonable, all forward-looking statements are inherently subjective, uncertain and subject to change, as they involve substantial risks and uncertainties beyond our control. New factors emerge from time to time, and it is not possible for us to predict the nature, or assess the potential impact, of each new factor on our business. Given these uncertainties, we caution you not to place undue reliance on these forward-looking statements. We undertake no obligation to update or revise any of our forward-looking statements for events or circumstances that arise after the statement is made, except as otherwise may be required by law.

This list of risks and uncertainties, however, is only a summary of some of the most important factors and is not intended to be exhaustive. Additional information regarding risk factors that may affect us is included under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008.

For an understanding of the significant factors that influenced our results, the following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and related notes appearing elsewhere in this report. This management’s discussion and analysis should also be read in conjunction with the management’s discussion and analysis and consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2008.

~~acquisition~~Business of Syniverse Holdings resulting in the termination of 10 employees. As a result, we incurred $0.3 million in severance related costs in April 2004. On February 28, 2003, we completed a restructuring plan, resulting in the termination of 71 employees or approximately 10.6% of our workforce. As a result, we incurred $1.8 million in severance related costs in February 2003.

~~Interest~~We ~~income~~are ~~increased~~a ~~$0.3~~leading ~~million~~enabler toof ~~$0.4 million~~wireless voice and data services for telecommunications companies worldwide. For over 20 years, we have served as one of the ~~three~~wireless ~~months~~industry’s ~~ended~~operator-neutral ~~June~~intermediaries, 30solving the challenges that arise as new technologies, ~~2004~~standards ~~from~~and $0protocols emerge.1 ~~million~~Our data clearinghouse, network and technology services solve technical and operational challenges for the ~~same~~wireless ~~period~~industry inby ~~2003.~~translating ~~Interest~~incompatible ~~income~~communication ~~increased~~standards ~~$0.2~~and ~~million~~protocols and tosimplifying $0operator interconnectivity.6 ~~million~~Our ~~for~~suite ~~the~~of ~~six~~transaction-based ~~months~~services ~~ended~~allows ~~June~~operators 30to deliver seamless voice, ~~2004~~data ~~from~~and ~~$0.4~~next ~~million~~generation ~~for~~services ~~the~~to ~~same~~wireless ~~period~~subscribers, inincluding ~~2003.~~wireless ~~The~~voice ~~increase~~and data roaming, Short Message ~~was~~Service ~~due~~(SMS), toMultimedia ~~higher~~Messaging ~~interest~~Services ~~collections~~(MMS) ~~from~~and ~~our~~Mobile ~~customers~~Instant inMessaging ~~2004~~(MIM), number portability and wireless value-added services.

~~Interest~~Demand ~~expense~~for ~~decreased~~our ~~$1.5~~services ~~million~~is todriven ~~$12~~primarily by wireless voice and data traffic, subscriber roaming activity, SMS and MMS messaging, number porting and next generation IP applications.4 ~~million~~The ~~for~~global ~~the~~wireless ~~three~~telecommunications ~~months~~industry ~~ended~~is expected ~~June~~to 30grow due to continued subscriber growth, ~~2004~~increased ~~from~~usage ~~$13~~and deployment of new services.9 ~~million~~In addition, subscriber adoption of new wireless technologies and services can also drive demand for our services due to the ~~same~~resulting ~~period~~increase in interoperability ~~2003~~complexities. ~~Interest~~The ~~expense~~global ~~decreased~~wireless ~~$4.8~~industry ~~million~~relies toon ~~$26.3~~an ~~million~~extensive ~~for~~and ~~the~~complex ~~six~~set ~~months~~of ~~ended~~communication ~~June~~standards, 30technical protocols, ~~2004~~ ~~from~~network ~~$31.1~~interfaces ~~million~~and ~~for~~systems ~~the~~that ~~same~~must ~~period~~successfully communicate with one another in ~~2003~~order to provide voice and data services to subscribers in their local markets and when roaming. The ~~decrease~~proliferation ~~was~~of ~~primarily~~these ~~due~~standards has resulted in technological incompatibilities, which are increasingly difficult to amanage ~~lower~~as ~~principal~~new ~~balance~~wireless ontechnologies and services are introduced and deployed. We believe that as wireless usage expands and complexity continues to increase, the ~~senior~~demand ~~credit~~for ~~facility~~our services will grow.

~~Provision~~We ~~for~~have ~~income~~developed ~~taxes~~a ~~increased~~broad ~~$0.3~~set ~~million~~of toinnovative ~~$2.1~~interoperability ~~million~~solutions ~~for the three months ended June 30, 2004 from $1.8 million for the same period~~ in ~~2003. Provision~~response ~~for income taxes increased $3.8 million~~ to ~~$4.2 million for~~ the ~~six~~evolving ~~months~~needs ended June 30, 2004 from $0.4 million for the same period in 2003. In 2004, our provision represents the increase in deferred tax liabilities associated with nondeductible goodwill. The increase was primarily due to the continued recognition of ~~a significant valuation allowance against~~ our ~~deferred tax assets~~customers. ~~Statement~~Through of Financial Accounting Standards No. 109, “Accounting for Income Taxes” (SFAS 109), requires a valuation allowance to reduce the deferred tax assets reported if, based upon the weight of evidence, its more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences and NOLs (net operating losses) become deductible or are utilized. Primarily as a result of our ~~impairment~~integrated ~~loss~~suite ~~in the fourth quarter~~ of ~~2003~~services, we ~~concluded~~enable ~~that~~operators ~~it was appropriate~~ to ~~establish~~provide atheir ~~full~~customers ~~valuation allowance against our net deferred tax assets, excluding goodwill. The deferred tax assets arise primarily from accumulated federal and state net operating~~with ~~losses~~enhanced ofwireless ~~approximately~~services ~~$92~~including: million and $252 million, respectively, which expire between 2006 and 2022. These losses relate primarily to Brience’s operations in periods prior to the February 14, 2002 date when those results have been included in our financial statements. In addition, because we do not amortize goodwill for financial reporting purposes and cannot predict if and when this deferred tax liability will be utilized, we are unable to consider the associated deferred tax liabilities of approximately $23.9 million in this analysis.

~~Undeclared~~• ~~and~~national ~~unpaid preferred unit dividends were $7.8 million for the three months ended June 30, 2004~~ and ~~$7.1~~international ~~million~~wireless ~~for~~voice ~~the three months ended June 30, 2003. Undeclared~~ and ~~unpaid~~data preferred unit dividends were $15.4 million for the six months ended June 30, 2004 and $13.9 million for the six months ended June 30, 2003. The preferred unit dividends relate to the 10% preferred yield on the Class B preferred units issued on February 14, 2002. These dividends compound quarterly. The amounts are not recorded as liabilities until declared. roaming;

~~Restructurings~~ • mobile data services, including SMS, MMS and MIM, across incompatible standards and protocols;

On• ~~February~~intelligent ~~28,~~network ~~2003,~~services wesuch ~~completed~~as awireless ~~restructuring~~number ~~plan resulting~~portability inand ~~the~~advanced ~~termination~~IP ofservice 71offerings; employees or approximately 10.6% of our workforce. As a result, we incurred $1.8 million in severance related costs in February 2003. The payments related to this restructuring were completed in November 2003. We expect this reorganization to result in reduced annual expenses of approximately $5.8 million. and

On• ~~April~~prepaid ~~20,~~applications ~~2004,~~and wevalue-added ~~completed~~roaming ~~a restructuring plan in connection with our acquisition of Syniverse Holdings resulting in the termination of 10 employees~~services. As a result, we incurred $0.3 million in severance related costs in April 2004. The payments related to this restructuring were paid in April 2004. We expect this reorganization to result in reduced annual expenses of approximately $1.1 million. Further restructuring may be necessary in light of current economic conditions.

~~Liquidity~~Our service platforms also enable operators to rapidly and ~~Capital~~cost-effectively ~~Resources~~deploy next-generation wireless services including enhanced wireless data, wireless Voice-over-Internet Protocol, or VoIP, and wireless value-added services.

~~During~~We ~~the~~provide ~~six months ended June 30, 2004,~~ our ~~operations~~services ~~generated $35.1 million of cash as compared~~ to ~~$25.2~~more ~~million~~than ~~for~~650 ~~the~~operators ~~comparable~~in ~~period~~over in140 ~~2003~~countries. ~~The~~We ~~increase~~serve ~~was~~most ~~primarily~~of ~~attributable to higher net income in~~ the ~~six~~largest ~~months~~global wireless ~~ended~~operators ~~June~~including 30AT&T, ~~2004.~~Sprint/Nextel, ~~Cash~~T-Mobile, ~~and~~Verizon ~~cash~~Wireless, ~~equivalents~~America ~~were~~Moviles, ~~$11.2~~Telefonica, ~~million~~China ~~at June 30~~Telecom, ~~2004 as compared to $8.3 million at December 31~~KDDI, ~~2003. This increase was due primarily to higher net income offset by an increase in working capital. Our working capital increased $5.6 million~~TeliaSonera, ~~from ($1.5) million at December 31~~Vodafone, ~~2003~~VimpelCom toand ~~$4.1~~SK ~~million at June 30, 2004~~Telecom. ~~This~~We ~~increase~~believe inthat ~~working~~maintaining ~~capital~~strong ~~was~~relationships ~~primarily~~with ~~due to the increase in~~ our ~~accounts~~customers is ~~receivable~~one ~~driven by the implementation~~ of ~~Number~~our ~~Porting~~core ~~Services~~competencies ~~offset by an increase in current liabilities. Capital expenditures for property~~ and ~~equipment,~~ ~~including~~that ~~capitalized~~maintaining ~~software~~these ~~costs,~~relationships ~~increased~~is ~~from~~critical ~~$5.2 million for the six months ended June 30, 2003~~ to ~~$12.1~~our ~~million for the six months ended June 30, 2004~~success.

WeServices have also used off-balance sheet financing in recent years primarily in the form of operating leases for facility space and some equipment leasing and we expect this will continue. Our remaining operating lease payment obligations for 2004 total approximately $2.9 million based on leases in effect at June 30, 2004.

We provide an integrated suite of services to wireless telecommunications operators that meet the evolving technology requirements of the wireless industry. These services include:

•

Technology Interoperability Services. We operate one of the largest wireless data clearinghouses globally, enabling the accurate invoicing and settlement of domestic and global wireless roaming telephone calls and wireless data events. We also provide financial settlement services, SMS and MMS routing and translation, roaming fraud prevention services, interstandard roaming solutions and Mobile Data Roaming (MDR) services between operators. In addition, we have expanded our mobile data solutions to include interactive video and mobile broadband solutions, prepaid applications and value-added roaming services. Wireless operators send data records to our service platforms for processing, aggregation, translation and distribution between operators.

•

Network Services. We connect disparate wireless and fixed line operator networks and enable access to intelligent network database services like caller ID and provide translation and routing services to support the establishment and delivery of telephone calls through our SS7 hub. SS7 is the telecommunications industry’s standard network signaling protocol used by substantially all operators to enable critical telecommunications functions such as number portability, toll-free calling services and caller ID.

•

Number Portability Services. Our leading number portability services are used by many wireless operators, including most U.S. domestic operators, to enable wireless subscribers to switch service providers while keeping the same telephone number. We also provide these services to all wireless operators in Canada and Singapore.

~~For~~• ~~fiscal~~Call ~~2004,~~Processing weServices. ~~expect~~We toprovide ~~spend~~wireless ~~approximately~~operators ~~$20.0~~with ~~million~~global ~~for~~call ~~capital expenditures~~handling, ~~primarily~~signaling ~~for our SS7 network expansion~~ and ~~infrastructure~~fraud tomanagement ~~support~~solutions ~~our~~that ~~products.~~enable ~~For~~wireless ~~the~~subscribers ~~six~~from ~~months~~one ~~ended~~operator ~~June~~to ~~30,~~make ~~2004,~~and weaccept ~~spent~~telephone ~~approximately~~calls ~~$12.1~~while ~~million~~roaming ~~for~~on ~~capital~~another ~~expenditures,~~operator’s ~~primarily for investment in our SS7~~ network.

We• ~~have~~Enterprise ~~significant debt service payment obligations, including interest, in future years~~Solutions. Total cash interest payments related to our revolving credit facility, Term B Loan and our senior notes were $46.2 million in 2003 and $21.8 million in the six months ended June 30, 2004. In the year ended December 31, 2003, we made a $37.3 million excess cash flow payment, $19.8 million in scheduled principal payment obligations on this indebtedness, and a $5.0 million prepayment on the Term B Loan. In the six months ended June 30, 2004, we made a $3.0 million excess cash flow payment and $17.1 million in scheduled principal payment obligations on this indebtedness. Our ~~outstanding~~enterprise ~~debt~~wireless ~~has~~data ~~principal~~management ~~payment~~platform ~~schedules~~enables ~~requiring~~operators ~~payments~~to ~~over~~offer alarge ~~five~~corporate ~~and~~customers ~~seven-year~~reporting ~~period for the Term B Loan~~ and ~~the~~analysis ~~senior~~tools notes, respectively. The following are the combined principal payment obligations remaining on this indebtedness as of June 30, 2004: $17.2 million in 2004, $44.0 million in 2005 and $135.0 million in 2006. In addition, we are required to ~~prepay~~manage ~~amounts outstanding~~telecom-related ~~under the senior credit facility in an amount equal to 75% of the excess cash flow, as defined in the senior credit facility, for each fiscal year~~expenses.

~~The~~• ~~senior~~Off-Network ~~credit~~Database ~~facility contains various restrictive covenants, which we amended in September 2003~~Queries. ItWe ~~prohibits~~provide usour ~~from~~customers ~~prepaying~~with ~~other indebtedness, including~~ the ~~senior~~ability ~~notes,~~to ~~and~~connect ~~it requires us~~ to ~~maintain~~various ~~specified~~third-party ~~financial~~intelligent ~~ratios,~~network ~~such~~database asproviders. aThese ~~minimum~~providers ~~ratio of pro forma EBITDA to interest expense, a minimum fixed~~ charge ~~coverage~~us ~~ratio,~~ a ~~maximum~~per-transaction ~~ratio~~fee offor ~~senior~~access ~~debt~~ to ~~pro~~their ~~forma EBITDA and a maximum ratio of total debt to pro forma EBITDA~~databases, ~~and~~which ~~satisfy~~we ~~other~~pass ~~financial condition tests including limitations~~ on ~~capital expenditures. In addition, the senior credit facility prohibits us from declaring or paying any dividends and prohibits us from making any payments with respect~~ to ~~the senior notes if we fail to perform~~ our ~~obligations~~customers ~~under,~~with orlittle ~~fail to meet the conditions of, the senior credit facility~~ or ifno ~~payment creates a default under the senior credit facility~~margin. ~~We are in compliance with all covenants as of June 30, 2004.~~

~~On March~~Executive ~~11,~~Overview 2004, we entered into the Second Amendment to Credit Agreement (the “Second Amendment”) with our lenders (Term B Loan and Revolving Credit) signatory thereto and Lehman Commercial Paper Inc., as administrative agent for the lenders (the “Agent”). The Second Amendment was effective March 11, 2004 and amends our senior credit facility by (i) providing for the incurrence under our senior credit facility of new Term B Loans, which will refinance, in full, all remaining outstanding Term B Loans and (ii) reduces the percentage of Excess Cash Flow which must be applied to prepay the loans to 75%. The Applicable Margin with respect to the Term B Loans is 2.5% for Base Rate Loans and 3.5% for Eurodollar Loans. The cost of the amendment of $0.4 million was recognized in interest expense in the six months ended June 30, 2004.

~~The~~Second ~~indenture~~Quarter ~~governing~~Financial ~~the~~Highlights senior notes, among other things: (i) restricts our ability and the ability of our subsidiaries to incur additional indebtedness, issue shares of preferred stock, incur liens, pay dividends or make certain other restricted payments and enter into certain transactions with affiliates; (ii) prohibits certain restrictions on the ability of certain of our subsidiaries to pay dividends or make certain payments to us; and (iii) places restrictions on our ability and the ability of our subsidiaries to merge or consolidate with any other person or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of our assets. The indenture related to these notes and the senior credit facility also contains various covenants that limit our discretion in the operation of our businesses.

~~Our~~For ~~principal~~the ~~source~~three ofmonths ~~liquidity~~ended ~~will~~June 30, be2009, ~~cash~~total ~~flow~~revenue ~~generated~~decreased ~~from~~$14.1 ~~operations and~~million, ~~borrowings~~or ~~under~~11.1%, ~~our~~to ~~senior~~$113.5 ~~credit~~million ~~facility~~from $127.6 ~~Our~~million ~~principal~~for ~~use~~the ofsame ~~cash~~period in ~~will~~2008. beNet toincome ~~meet~~decreased ~~debt~~$3.9 ~~service requirements~~million, ~~finance~~or ~~our capital expenditures~~19%, ~~make~~to ~~acquisitions~~$16.5 ~~and~~million ~~provide~~for ~~working~~the ~~capital.~~three Wemonths ~~expect~~ended ~~that~~June 30, ~~cash~~2009 ~~available~~ from ~~operations combined with the availability of~~ $3520.04 million ~~under~~for ~~our~~the ~~revolving~~same ~~line~~period ofin ~~credit~~2008. ~~will~~Diluted beearnings ~~sufficient~~per toshare ~~fund~~was ~~our~~$0.24 ~~operations, debt service~~ and ~~capital~~$0.30 ~~expenditures~~ for atthe ~~least~~three ~~the~~months ~~next~~ended June 30, 122009 ~~months~~and 2008, respectively.

~~Our~~Technology ~~ability~~Interoperability toservices ~~make~~revenues ~~payments~~decreased on$13.9 ~~and~~million, toor ~~refinance~~17.3%, ~~our debt and~~ to ~~fund planned~~$66.3 ~~capital~~million ~~expenditures~~for ~~will depend on our ability to generate sufficient cash in~~ the ~~future.~~three ~~This,~~months toended ~~some extent~~June 30, is2009 ~~subject~~compared to ~~general~~$80.2 ~~economic,~~million ~~financial,~~for ~~competitive~~the ~~and~~same ~~other~~period ~~factors~~in ~~that are beyond our control~~2008. WeThe ~~believe~~revenue ~~that,~~decrease ~~based~~was ~~upon current~~driven ~~levels~~by ofdecreases ~~operations,~~in wedata ~~will~~clearinghouse beservices ~~able~~primarily toresulting ~~meet~~from ~~our~~lower ~~debt~~prices ~~service~~related ~~obligations~~to ~~when~~the ~~due.~~renewal ~~Significant~~of the ~~assumptions~~Verizon ~~underlie~~contract ~~this~~in ~~belief,~~September ~~including,~~2008 ~~among~~and ~~other~~the ~~things,~~loss ~~that~~of weMDR ~~will~~transactions ~~continue~~between toAlltel ~~be successful in implementing our business strategy~~ and ~~that~~Sprint ~~there~~resulting ~~will~~from bethe noAlltel/Sprint ~~material~~insourcing ~~adverse~~initiative. ~~developments~~In inaddition, our ~~business,~~technology ~~liquidity~~turnkey orsolutions ~~capital~~offering ~~requirements.~~has Ifexperienced ~~our~~lower ~~future~~sales ~~cash~~due ~~flow~~to delayed ~~from operations and other~~ capital ~~resources~~spending ~~are~~by ~~insufficient~~operators toin ~~pay~~the ~~our~~Asia ~~obligations~~Pacific asregion. ~~they~~Number ~~mature~~Portability orservices torevenues ~~fund~~increased ~~our liquidity~~$1.4 ~~needs~~million, weor ~~may~~21%, ~~be forced~~ to ~~reduce~~$7.8 ormillion ~~delay~~for ~~our~~the ~~business~~three ~~activities~~months ~~and~~ended ~~capital expenditures~~June 30, ~~sell~~2009 ~~assets,~~from ~~obtain~~$6.4 ~~additional~~million ~~debt~~for orthe ~~equity~~same ~~capital~~period orin ~~restructure~~2008 ordue ~~refinance~~to increased ~~all~~porting orvolumes. aNetwork ~~portion~~services ofrevenues ~~our~~decreased ~~debt~~$0.8 onmillion, or ~~before maturity~~2.6%, Weto ~~cannot assure~~$30.8 ~~that~~million wefor ~~would~~the bethree ~~able~~months toended ~~accomplish~~June 30, ~~any~~2009 offrom ~~these~~$31.6 ~~alternatives~~million onfor athe ~~timely~~same ~~basis~~period orin on2008. ~~satisfactory~~Revenues ~~terms,~~from ifCall atProcessing ~~all. In addition~~services, ~~the~~Enterprise Solutions ~~terms~~and ofOff-Network ~~our~~Database ~~existing~~Queries ~~and~~decreased ~~future~~a ~~indebtedness,~~total ~~including~~of ~~the~~$0.8 ~~senior~~million ~~notes~~for ~~and~~the ~~our~~three ~~senior~~months ~~credit~~ended ~~facility~~June 30, ~~may~~ ~~limit~~2009 ~~our~~compared ~~ability~~ to ~~pursue~~the ~~any~~same ofperiod ~~these~~in ~~alternatives~~2008.

Business Developments

India Number Portability Services

In February 2009, we entered into a joint venture agreement to implement number portability services in India. Syniverse was awarded the license for Zone 1, which includes the service areas of Delhi, Mumbai and nine others. We expect to provide India’s telecommunications operators with number portability clearinghouse and centralized database solutions for the next 10 years. The service offering is dependent on completing the processing platform and database, operator readiness and regulatory confirmation of the implementation timeline.

Acquisition of Wireless Solutions International

On May 15, 2009, we acquired Wireless Solutions International (WSI). The acquisition was funded by a cash payment from our existing cash balances and common stock. The acquisition of this GSM Association (GSMA)-certified roaming hub provider will further enhance Syniverse’s global roaming reach. The acquisition of WSI will extend Syniverse’s relationships with a number of existing customers and introduce new relationships with several operators across the Americas.

2008 Events Affecting 2009

During 2008, there were several developments that we expect will impact our growth rates in 2009. These developments include the Verizon acquisition of Alltel and the Alltel/Sprint insourcing initiative. Each of these developments is described below.

Verizon Acquisition of Alltel

During the second quarter of 2008, Verizon Wireless (Verizon) announced that it would acquire Alltel Corporation (Alltel). Verizon completed its acquisition of Alltel in January 2009. The impact of the combination of these two customers on us ranges across a variety of services, and affects revenues we receive not only from Verizon and Alltel, but from other roaming partners as well. The revenue impact is dependent on Verizon’s integration schedule and our revenue and net income expectations for 2009 include very

~~Effect~~ specific integration assumptions. These assumptions concern roaming traffic between Verizon and Alltel and other roaming traffic where Verizon has coverage but where Alltel currently uses a different roaming partner. The assumptions are based on the current and best information available to us and we can provide no assurance that the actual impact of ~~Inflation~~this transaction will not be more or less than what is reflected in our 2009 revenue and net income expectations.

~~Inflation~~Alltel/Sprint ~~generally~~Insourcing ~~affects~~Initiative us by increasing our cost of labor, equipment and new materials. We do not believe that inflation has had any material effect on our results of operations during the six months ended June 30, 2004 and 2003.

~~Critical~~In ~~Accounting~~order ~~Policies~~to manage the expense associated with the significant volume growth in mobile data, Alltel and Sprint directly connected their IP backbone networks in January 2009. Thus, they no longer use Syniverse as a third party intermediary to manage the connectivity and exchange of billing records between their mobile data roaming platforms. Our revenue and net income expectations for 2009 include the impact of this insourcing initiative from the January 2009 effective date.

~~The~~Revenues following discussion and analysis of financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements and related notes herein. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. We evaluate our estimates on a continual basis, including those related to revenue recognition, allowance for doubtful accounts, property and equipment, and intangible assets. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

~~Revenue~~Most ~~Recognition~~of our revenues are transaction-based charges under long-term contracts, typically with terms averaging three years in duration. From time to time, if a contract expires and we have not previously negotiated a new contract or renewal with the customer, we continue to provide services on a month to month billing schedule under the terms of the expired contract as we negotiate new agreements or renewals. Most of the services and solutions we offer to our customers are based on applications, network connectivity and technology platforms owned and operated by us. We also generate revenues through the sale of software licenses, hardware and professional services. We generate our revenues through the sale of our technology interoperability services, network services, number portability services, call processing services, enterprise solutions and off-network database queries to telecommunications operators throughout the world. Generally, there is a slight increase in wireless roaming telephone usage and corresponding revenues in the high-travel months of our second and third fiscal quarters.

WeFuture ~~derive~~increases or decreases in revenues ~~from~~are ~~five~~dependent ~~primary~~on ~~categories:~~many ~~Network~~factors, ~~Services~~such as industry subscriber growth, ~~Number Porting~~subscriber ~~Services~~habits, ~~Technology~~and ~~Interoperability~~volume ~~Services~~and pricing trends, ~~Call~~with ~~Processing~~few ~~Services~~of ~~and~~these ~~Other~~factors ~~Outsourcing~~known ~~Services~~in advance. ~~The~~From ~~revenue~~time ~~recognition~~to ~~policy~~time, ~~for~~specific ~~each~~events such as customer contract renewals at different terms, a customer contract termination, a customer’s decision to change technologies or to provide solutions in-house, or a consolidation of ~~these~~operators ~~areas~~will isbe asknown ~~follows:~~to us and then we can estimate their impact on our revenues.

•Costs ~~Network Services primarily generate revenue by charging per-transaction processing fees, circuit fees~~ and ~~port~~Expenses fees. The monthly SS7 connection fee is based on the number of links as well as the number of switches to which a customer signals and is recognized in the period when the service is rendered. The per-transaction fees are based on the number of subscriber events and database queries made through our network and are recognized as revenues at the time the transactions are performed. Syniverse Brience’s software revenues are generated through license fees, maintenance agreements and professional services. License fee revenues consist principally of revenue from the licensing of our software. Revenue is recognized from the software license fees on a straight-line basis over the period beginning with the completion of implementation and customer acceptance and ending with conclusion of the first maintenance period. Maintenance agreements call for us to provide technical support and software enhancements to customers. Revenue on technical support and software enhancement rights is recognized ratably over the term of the support agreement. Professional services include consulting, training and installation services to our customers. Revenue from such services is generally recognized on a straight-line basis over the same period as the software license fee.

•Our ~~Number~~costs ~~Porting~~and ~~Services~~expenses ~~primarily~~consist ~~generate~~of ~~revenues~~cost byof ~~charging per-transaction processing fees~~operations, ~~monthly~~sales ~~fixed~~and ~~fees~~marketing, general and ~~fees~~administrative ~~for customer implementations. We defer revenues related to customer implementations,~~ and ~~recognize~~depreciation ~~these fees on a straight-line basis over the life of the initial customer agreements. We recognize processing revenues at the time the transactions~~ and ~~services are performed~~amortization.

• ~~Technology~~Cost ~~Interoperability~~of ~~Services~~operations ~~primarily~~includes ~~generate~~data ~~revenues by charging per-transaction~~ processing ~~fees.~~costs, ~~For~~network ~~our~~costs, ~~wireless~~facilities ~~roaming~~costs, ~~wireline~~hardware ~~and~~costs, ~~SMS~~licensing ~~clearinghouse services~~fees, ~~revenues~~personnel ~~vary~~costs ~~based~~associated onwith ~~the~~service ~~number of data/messaging records provided to us by telecommunications carriers for aggregation~~implementation, ~~translation~~training and ~~distribution~~customer ~~among~~care ~~carriers. These revenues are based on the number of wireless roaming subscriber telephone calls~~ and ~~messages~~off-network ~~that~~database ~~take~~query ~~place on our customers’ networks~~charges. ~~We recognize revenues at the time the transactions are performed.~~

• ~~Call~~Sales ~~Processing Services primarily generate revenue by charging per-transaction processing fees~~ and ~~software~~marketing ~~licensing~~includes ~~fees.~~personnel ~~The~~costs, ~~per-transaction~~advertising ~~fee is based on the number of validation~~costs, ~~authorization,~~trade ~~and~~show ~~other~~costs ~~call processing messages generated by wireless subscribers~~ and isrelationship ~~recognized~~marketing ~~as revenues at the time the transactions are performed~~costs. ~~We also provide turnkey software solutions for which we charge customers a software licensing fee. For turnkey software, we recognize revenue when accepted by the customer.~~

• ~~Other~~General ~~Outsourcing~~and ~~Services~~administrative ~~primarily~~includes ~~generate~~research ~~revenue~~and bydevelopment ~~charging~~expenses, ~~per-subscriber~~a portion of the expenses associated with our facilities, business development expenses, and expenses for executive, finance, legal, human resources and other administrative departments and professional service fees relating to these functions. WeOur ~~recognize~~research ~~revenues~~and atdevelopment expenses, which are primarily personnel, relate to technology creation, enhancement and maintenance of new and existing services. Historically, most of these costs are expensed and recorded as general and administrative expenses. The capitalized portion, which is recorded as capitalized software costs, relates to costs incurred during the ~~time~~application development stage for the new service isofferings ~~performed~~and significant service enhancements.

•

Depreciation and amortization relate primarily to our property and equipment including our SS7 network, infrastructure facilities related to information management, capitalized software and other intangible assets recorded in purchase accounting.

~~Due~~Results ~~to our billing cycles, for which some~~ of ~~our~~Operations products lag as much as 60 days after services are rendered, we estimate the amounts of unbilled revenue each reporting period. Our estimates are based on recent volume and pricing trends adjusted for material changes in contracted service. Historically, our estimates have correlated well with our actual billed revenue. Unanticipated changes in volume and pricing trends or material changes in contracted service could adversely affect our estimates of unbilled revenue.

~~Allowance~~The following tables present an overview of our results of operations for ~~Doubtful~~the ~~Accounts~~three and six months ended June 30, 2009 and 2008:

We maintain allowances for doubtful accounts for estimated losses resulting from the inability of our customers to pay their invoices to us in full. We regularly review the adequacy of our accounts receivable allowance after considering the size of the accounts receivable balance, each customer’s expected ability to pay and our collection history with each customer. We review significant invoices that are past due to determine if an allowance is necessary based on the risk category using the factors described above. We also review any general economic conditions in the countries in which our customers operate which could effect their ability to pay us in full. In addition, we maintain a general allowance for doubtful accounts by applying a percentage based on the aging category. Our estimates for allowances for doubtful accounts have tracked well with our actual experience of customers who are unable to pay their invoices in full. If our customers’ financial conditions or the economy in general deteriorates, we may need to increase these allowances for doubtful accounts.


	Three Months Ended June 30, 2009			% of Revenues		Three Months Ended June 30, 2008			% of Revenues		2009 vs. 2008 $			Change %
	(dollars in thousands)
Revenues:
Technology Interoperability Services	$	66,343		58.5	%	$	80,209		62.9	%	$	(13,866	)	(17.3	)%
Network Services		30,819		27.1	%		31,643		24.8	%		(824	)	(2.6	)%
Number Portability Services		7,788		6.9	%		6,435		5.0	%		1,353		21.0	%
Call Processing Services		6,435		5.7	%		7,313		5.7	%		(878	)	(12.0	)%
Enterprise Solutions		390		0.3	%		634		0.5	%		(244	)	(38.5	)%


Revenues excluding Off-Network Database
Queries		111,775		98.5	%		126,234		98.9	%		(14,459	)	(11.5	)%
Off-Network Database Queries		1,703		1.5	%		1,385		1.1	%		318		23.0	%

Total revenues		113,478		100.0	%		127,619		100.0	%		(14,141	)	(11.1	)%

Costs and expenses:
Cost of operations		40,904		36.0	%		41,589		32.6	%		(685	)	(1.6	)%
Sales and marketing		8,835		7.8	%		12,200		9.5	%		(3,365	)	(27.6	)%
General and administrative		17,005		15.0	%		19,868		15.6	%		(2,863	)	(14.4	)%
Depreciation and amortization		14,037		12.4	%		13,791		10.8	%		246		1.8	%

		80,781		71.2	%		87,448		68.5	%		(6,667	)	(7.6	)%

Operating income		32,697		28.8	%		40,171		31.5	%		(7,474	)	(18.6	)%

Other income (expense), net:
Interest income		49		0.1	%		482		0.4	%		(433	)	(89.6	)%
Interest expense		(7,495	)	(6.6	)%		(9,407	)	(7.4	)%		(1,912	)	(20.3	)%
Other, net		851		0.7	%		(272	)	(0.2	)%		1,123		(412.9	)%

		(6,595	)	(5.8	)%		(9,197	)	(7.2	)%		(2,602	)	(28.3	)%

Income before provision for income taxes		26,102		23.0	%		30,974		24.3	%		(4,872	)	(15.7	)%
Provision for income taxes		9,624		8.5	%		10,622		8.3	%		(998	)	(9.4	)%

Net income		16,478		14.5	%		20,352		16.0	%		(3,874	)	(19.0	)%
Less: Net loss attributable to noncontrolling interest		(53	)	(0.1	)%		—		0.0	%		(53	)	(100.0	)%

Net income attributable to Syniverse Holdings, Inc.	$	16,531		14.6	%	$	20,352		16.0	%	$	(3,927	)	18.8	%

Allowance for Credit Memos

We maintain a general reserve based on our historical credit memo activity. In addition, we establish credit memo reserves resulting from specific customer matters. Changes in this allowance are recognized as adjustments to revenue and are recorded as a direct reduction of accounts receivable. Since our allowances for credit memos are derived in large part from specific customer matters, our estimates have tracked well with our actual credit memo experience. We also maintain a general reserve for credit memos related to billing errors or other similar items. If our billing errors or discrepancies are not resolved satisfactorily, or our customers’ disputes over billing are not resolved satisfactorily, increases to the allowance would be required.

Impairment Losses

We review our long-lived assets, including intangibles with definite lives, for impairment when events or changes in circumstances indicate the carrying value of such assets may not be recoverable. We review goodwill at least annually for impairment. We also evaluate the useful life of assets periodically. The review consists of a comparison of the carrying value of the assets with the assets’ expected future undiscounted cash flows without interest costs. Estimates of expected future cash flows represent management’s best estimate based on reasonable and supportable assumptions and projections. If actual market conditions are less favorable than those projected by management, asset write-downs may be required. Management will continue to evaluate overall industry and company specific circumstances and conditions as necessary.

Restructuring

We have made estimates of the costs to be incurred as a part of our initial restructuring plan in February 2002 arising from our acquisition of Syniverse, and in the December 2003 purchase accounting for Syniverse Holdings. These amounts were accrued as a part of our purchase accounting adjustments. We will review these estimates until fully paid. We have also made estimates of the costs to be incurred as a part of our August 2002, February 2003, July 2003 and April 2004 restructurings. If our original estimates of the costs of restructuring change, we will need to adjust our reserve amounts.

Loss Contingencies

We are involved in asserted and unasserted claims, which arise in the ordinary course of our business. We routinely evaluate whether a loss is probable, and if so, whether it can be estimated. Accruals for probable losses are recorded in accrued expenses, the allowance for doubtful accounts or the allowance for credit memos if the dispute relates to a customer matter. If our assessment of the probability is inaccurate, we may need to record additional accruals or reduce recorded accruals later. In addition, we may need to adjust our estimates of the probable loss amounts as further information is obtained or as we consider settlements.

Purchase Accounting

We have made estimates of the fair values of the assets acquired as of February 14, 2002 based on appraisals from third

parties and also based on certain internally generated information. We also made estimates related to the fair values of assets acquired from Syniverse Holdings in December 2003. In addition, we have estimated the economic lives of certain of these assets and these lives were used to calculate depreciation and amortization expense.


	Six Months Ended June 30, 2009			% of Revenues		Six Months Ended June 30, 2008			% of Revenues		2009 vs. 2008 $			Change %
	(dollars in thousands)
Revenues:
Technology Interoperability Services	$	129,263		58.1	%	$	148,911		61.2	%	$	(19,648	)	(13.2	)%
Network Services		60,794		27.3	%		61,384		25.2	%		(590	)	(1.0	)%
Number Portability Services		15,028		6.8	%		13,385		5.5	%		1,643		12.3	%
Call Processing Services		13,592		6.1	%		15,702		6.5	%		(2,110	)	(13.4	)%
Enterprise Solutions		780		0.4	%		1,419		0.6	%		(639	)	(45.0	)%

Revenues excluding Off-Network Database
Queries		219,457		98.7	%		240,801		99.0	%		(21,344	)	(8.9	)%
Off-Network Database Queries		2,945		1.3	%		2,463		1.0	%		482		19.6	%

Total revenues		222,402		100.0	%		243,264		100.0	%		(20,862	)	(8.6	)%

Costs and expenses:
Cost of operations		80,862		36.3	%		79,567		32.7	%		1,295		1.6	%
Sales and marketing		17,523		7.9	%		22,954		9.4	%		(5,431	)	(23.7	)%
General and administrative		34,003		15.3	%		38,010		15.6	%		(4,007	)	(10.5	)%
Depreciation and amortization		27,621		12.4	%		27,424		11.3	%		197		0.7	%
Restructuring		—		0.0	%		17		0.0	%		(17	)	(100.0	)%

		160,009		71.9	%		167,972		69.0	%		(7,963	)	(4.7	)%

Operating income		62,393		28.1	%		75,292		31.0	%		(12,899	)	(17.1	)%

Other income (expense), net:
Interest income		241		0.1	%		912		0.4	%		(671	)	(73.6	)%
Interest expense		(14,851	)	(6.7	)%		(19,127	)	(7.9	)%		(4,276	)	(22.4	)%
Other, net		1,134		0.5	%		(215	)	(0.1	)%		1,349		627.4	%

		(13,476	)	(6.1	)%		(18,430	)	(7.6	)%		(4,954	)	(26.9	)%

Income before provision for income taxes		48,917		22.0	%		56,862		23.4	%		(7,945	)	(14.0	)%
Provision for income taxes		16,407		7.4	%		21,117		8.7	%		(4,710	)	(22.3	)%

Net income		32,510		14.6	%		35,745		14.7	%		(3,235	)	(9.1	)%
Less: Net loss attributable to noncontrolling interest		(53	)	(0.1	)%		—		0.0	%		(53	)	(100.0	)%

Net income attributable to Syniverse Holdings, Inc.	$	32,563		14.7	%	$	35,745		14.7	%	$	(3,182	)	(8.9	)%

~~Income~~Comparison ~~Taxes~~of the Three and Six Months Ended June 30, 2009 and 2008

WeRevenues review our deferred tax assets on a regular basis to evaluate their recoverability based on projections of the turnaround timing of our deferred tax liabilities, projections of future taxable income, and tax planning strategies that we might employ to utilize such assets, including net operating loss carryforwards. Unless it is “more likely than not” that we will recover such assets through the above means, we establish a valuation allowance. As a result, we have concluded that it is appropriate to establish a full valuation allowance for our deferred tax assets net of all deferred tax liabilities except those liabilities associated with goodwill. The effective tax rate differs from the statutory tax rate due primarily to changes in the valuation allowance, and to a lesser extent, to state and local taxes.

~~Forward~~Total revenues decreased $14.1 million to $113.5 million for the three months ended June 30, 2009 from $127.6 million for the same period in 2008. Total revenues decreased $20.9 million to $222.4 million for the six months ended June 30, 2009 from $243.3 million for the same period in 2008. The decrease in revenues was primarily due to decreases in Technology Interoperability Services with lesser decline in Network Services, Call Processing Services and Enterprise Solutions offset in part by an increase in Number Portability Services and Off-~~Looking~~Network ~~Statements~~Database Queries.

WeTechnology ~~have~~Interoperability ~~made~~Services ~~forward-looking~~revenues ~~statements~~decreased ~~within~~$13.9 ~~the~~million ~~meaning~~to $66.3 ofmillion ~~Section~~for ~~27A of~~ the ~~Securities~~three ~~Act~~months ~~and~~ended ~~Section~~June 30, ~~21E~~2009 offrom ~~the~~$80.2 ~~Securities~~million ~~Exchange~~for ~~Act~~the ofsame ~~1934~~period in ~~this~~2008. ~~report~~Technology Interoperability Services revenues decreased $19.6 ~~The~~million ~~words~~to ~~“believes,”~~$129.3 ~~“anticipates,”~~million ~~“plans,”~~for ~~“expects,”~~the ~~“intends,”~~six ~~“estimates”~~months ~~and~~ended ~~similar~~June 30, 2009 from ~~expressions~~$148.9 ~~are~~million ~~intended~~for tothe ~~identify~~same ~~forward-looking~~period ~~statements~~in 2008. ~~These~~The ~~forward-looking~~revenue ~~statements~~decrease ~~involve~~was ~~known~~driven ~~and~~by ~~unknown~~decreases ~~risks,~~in ~~uncertainties~~data ~~and~~clearinghouse ~~other~~services ~~factors~~primarily ~~which~~resulting ~~may~~from ~~cause~~lower ~~our~~prices ~~actual~~related ~~results,~~to ~~performance~~the renewal of the Verizon contract in September 2008 and ~~achievements,~~the orloss ~~industry~~of ~~results,~~MDR totransactions bebetween ~~materially~~Alltel ~~different~~and Sprint resulting from ~~any~~the ~~future~~Alltel/Sprint ~~results~~insourcing initiative. In addition, ~~performance~~our ortechnology ~~achievements~~turnkey ~~expressed~~solutions oroffering ~~implied~~has experienced lower sales due to delayed capital spending by ~~such~~operators ~~forward-looking~~in ~~statements~~the Asia Pacific region.

~~All~~Network ~~forward-looking~~Services ~~statements~~revenues indecreased ~~this~~$0.8 ~~report~~million ~~are~~to ~~based~~$30.8 onmillion ~~information~~for ~~available~~the tothree usmonths onended ~~the~~June 30, ~~date~~2009 offrom ~~this report~~$31.6 million Wefor ~~undertake~~the nosame ~~obligation~~period toin ~~publicly update~~2008. orNetwork ~~revise~~Services ~~any~~revenues ~~forward-looking~~decreased ~~statement,~~$0.6 ~~whether~~million asto a$60.8 ~~result~~million offor ~~new~~the ~~information,~~six ~~future~~months ~~events~~ended orJune 30, ~~otherwise.~~2009 ~~All~~from ~~subsequent~~$61.4 ~~written~~million ~~and~~for ~~oral~~the ~~forward-looking~~same ~~statements~~period ~~attributable~~in to2008 ~~us,~~primarily ordue ~~persons~~to ~~acting~~decreases onin our ~~behalf,~~intelligent ~~are expressly~~network ~~qualified~~database inservices ~~their~~partially ~~entirety~~offset by ~~the~~growth ~~cautionary~~in ~~statements~~our ~~contained~~SS7 ~~throughout~~network ~~this report~~services.

Number Portability Services revenues increased $1.4 million to $7.8 million for the three months ended June 30, 2009 from $6.4 million for the same period in 2008. Number Portability Services revenues increased $1.6 million to $15.0 million for the six months ended June 30, 2009 from $13.4 million for the same period in 2008. The increase in revenues was primarily due to organic volume growth and our Singapore number portability services.

Call Processing Services revenues decreased $0.9 million to $6.4 million for the three months ended June 30, 2009 from $7.3 million for the same period in 2008. Call Processing Services decreased $2.1 million to $13.6 million for the six months ended June 30, 2009 from $15.7 million for the same period in 2008. The decrease in revenues was due to continued declines in our legacy fraud-related services and Signaling Solutions due to the September 2008 Verizon renewal and expected network migrations, which was partially offset by higher call processing volumes. We expect this decline to continue for our legacy fraud-related services.

Enterprise Solutions Services revenues decreased $0.2 million to $0.4 million for the three months ended June 30, 2009 from $0.6 million for the same period in 2008. Enterprise Solutions Services revenues decreased $0.6 million to $0.8 million for the six months ended June 30, 2009 from $1.4 million for the same period in 2008. The decrease in revenues was primarily due to a lower number of subscribers on our enterprise wireless data management platform. We expect this decline to continue.

Off-Network Database Queries revenues increased $0.3 million to $1.7 million for the three months ended June 30, 2009 from $1.4 million for the same period in 2008. Off-Network Database Queries revenues increased $0.4 million to $2.9 million for the six months ended June 30, 2009 from $2.5 million for the same period in 2008. The increase in revenues was primarily driven by increased volumes. We pass these off-network database query fees onto our customers, with little or no margin, based upon the charges we receive from the third-party database providers. We expect these services to decline in future periods.

Expenses

Cost of operations decreased $0.7 million to $40.9 million for the three months ended June 30, 2009 from $41.6 million for the same period in 2008. Cost of operations increased $1.3 million to $80.9 million for the six months ended June 30, 2009 from $79.6 million for the same period in 2008. The increase was primarily due to increased network and data processing costs to support customer growth. As a percentage of revenue, cost of operations increased from 32.6% and 32.7% for the three and six months ended June 30, 2008, respectively, to 36.0% and 36.3% for the same periods in 2009 as a result of the fixed nature of our cost of operations.

Sales and marketing expenses decreased $3.4 million to $8.8 million for the three months ended June 30, 2009 from $12.2 million for the same period in 2008. Sales and marketing expenses decreased $5.5 million to $17.5 million for the six months ended June 30, 2009 from $23.0 million for the same period in 2008. The decrease was primarily due to lower sales incentives, performance-based compensation and discretionary expenses.

General and administrative expenses decreased $2.9 million to $17.0 million for the three months ended June 30, 2009 from $19.9 million for the same period in 2008. General and administrative expenses decreased $4.0 million to $34.0 million for the six months ended June 30, 2009 from $38.0 million for the same period in 2008. The decrease was primarily due to lower performance-based compensation, professional services and discretionary expenses.

Depreciation and amortization expenses increased $0.2 million to $14.0 million for the three months ended June 30, 2009 from $13.8 million for the same period in 2008. Depreciation and amortization expenses increased $0.2 million to $27.6 million for the six months ended June 30, 2009 from $27.4 million for the same period in 2008.

Other

Interest income decreased $0.4 million to $0.1 million for the three months ended June 30, 2009 from $0.5 million for the same period in 2008. Interest income decreased $0.7 million to $0.2 million for the six months ended June 30, 2009 from $0.9 million for the same period in 2008. The decrease was due to lower yields earned on outstanding cash balances.

Interest expense decreased $1.9 million to $7.5 million for the three months ended June 30, 2009 from $9.4 million for the same period in 2008. Interest expense decreased $4.3 million to $14.8 million for the six months ended June 30, 2009 from $19.1 million for the same period in 2008. The decrease was primarily due to lower interest rates on our senior credit facility.

Other, net increased $1.1 million to $0.8 million for the three months ended June 30, 2009 from $(0.3) million for the same period in 2008. Other, net increased $1.3 million to $1.1 million for the six months ended June 30, 2009 from $(0.2) million for the same period in 2008. The increase was primarily due to foreign currency transaction gains on foreign denominated cash balances and intercompany accounts as a result of our global presence.

Provision for income taxes decreased $1.0 million to $9.6 million for the three months ended June 30, 2009 from $10.6 million for the same period in 2008. Provision for income taxes decreased $4.7 million to $16.4 million for the six months ended June 30, 2009 from $21.1 million for the same period in 2008. During the three months ended June 30, 2009 and 2008, the effective tax rate

was 36.9% and 34.3%, respectively. During the six months ended June 30, 2009 and 2008, the effective tax rate was 33.5% and 37.1%, respectively. During the six months ended June 30, 2009, the income tax provision was adjusted for a tax benefit of approximately $1.4 million due to an adjustment for an item believed to be non-deductible in prior periods. Excluding the effect of the adjustment, the effective tax rate for the six months ended June 30, 2009 is 36.2%. The reduction in our effective tax rate is attributed to the mix of income from foreign tax jurisdictions with lower tax rates and tax planning initiatives.

Liquidity and Capital Resources

Cash Flow Information

The following table sets forth, for the periods indicated, selected consolidated cash flow information (in thousands).


	Six Months Ended June 30,
	2009			2008
Net cash provided by operating activities	$	50,274		$	64,126
Net cash used in investing activities		(24,118	)		(21,184	)
Net cash used in financing activities		(480	)		(437	)
Effect of exchange rate changes on cash		(3,435	)		1,184

Net increase in cash	$	22,241		$	43,689

Net cash provided by operating activities was $50.3 million for the six months ended June 30, 2009 as compared to $64.1 million for the same period in 2008. The decrease was primarily related to lower net income adjusted for non-cash items and timing of working capital items including estimated tax payments. Cash and cash equivalents were $187.8 million at June 30, 2009 as compared to $165.6 million at December 31, 2008. Our working capital increased $46.7 million to $242.9 million at June 30, 2009 from $196.2 million at December 31, 2008, primarily due to increased cash balances, higher prepaid balances and lower accrued payroll and related benefits.

Net cash used in investing activities was $24.1 million for the six months ended June 30, 2009, which includes $20.9 million for capital expenditures and $3.2 million for the acquisition of WSI. Net cash used in investing activities was $21.2 for the six months ended June 30, 2008, which includes $20.4 million for capital expenditures and $0.8 million for the acquisition of BSG Wireless. Capital expenditures for both periods primarily related to investment in our internal infrastructure, including network infrastructure to support customer growth, and capitalized software.

Net cash used in financing activities was $0.5 million for the six months ended June 30, 2009, which includes $1.7 million of principal payments on our senior credit facility offset by the $1.0 million in capital contributions received from joint venture partners to acquire a non-controlling interest. Net cash used in financing activities was $0.4 million for the six months ended June 30, 2008, which includes $1.8 million of principal payments on our senior credit facility offset by $1.4 million for the issuance of stock.

On October 6, 2008, we entered into an interest rate swap agreement to hedge $100.0 million of our U.S.-denominated term loan under our senior credit facility. The hedge effectively swaps variable rate interest based on 1-month LIBOR to a fixed rate interest thereby reducing our exposure to interest rate fluctuations. The effective date of the swap is October 31, 2008 and the maturity date is October 31, 2010. The fixed rate is 5.26% based on our 2.76% swap rate plus our 2.50% applicable margin.

Our principal sources of liquidity are cash flows generated from operations and borrowings under our senior credit facility. Our principal uses of cash are to meet debt service requirements, finance our capital expenditures, make acquisitions and provide working capital. We expect that cash on hand, cash available from operations, and the availability of cash under our revolving line of credit will be sufficient to fund our operations, debt service and capital expenditures for the foreseeable future.

Debt and Credit Facilities

Amended and Restated Senior Credit Facility

On August 9, 2007, we entered into a $464.0 million amended and restated credit agreement, the senior credit facility, with Lehman Brothers Inc. and Deutsche Bank Securities Inc. as joint lead arrangers and joint book-running managers, Lehman Commercial Paper Inc., as administrative agent, Deutsche Bank AG New York Branch, as syndication agent, Bear Stearns Corporate Lending Inc. and LaSalle Bank National Association, as co-documentation agents and the lenders from time to time parties thereto. The obligations under the senior credit facility are unconditionally guaranteed by Syniverse, Inc. and all material U.S. domestic subsidiaries of Syniverse Technologies, Inc. (the “Guarantors”) and are secured by a security interest in substantially all of the tangible and intangible assets of Syniverse Technologies, Inc. and the Guarantors. The obligations under the senior credit facility are also secured by a pledge of the capital stock of Syniverse Technologies, Inc. and its direct and indirect U.S. subsidiaries.

The senior credit facility provides for aggregate borrowings of $464.0 million as follows:

•

a term loan of $112.0 million in aggregate principal amount;

•

a delayed draw term loan of $160.0 million in aggregate principal;

•

a Euro-denominated delayed draw term loan facility of the equivalent of $130.0 million;

•

a revolving credit line of $42.0 million; and

•

a Euro-denominated revolving credit line of the equivalent of $20.0 million.

On December 19, 2007, the delayed draw term loans of $290.0 million (delayed draw term loan of $160.0 million and Euro-denominated delayed draw term loan of the equivalent of $130.0 million) were used to fund the acquisition of the BSG Wireless including the repayment of existing debt and to pay related transaction fees and expenses. The delayed draw term loans were subject to a commitment fee of 1.25% per annum on undrawn amounts.

The applicable margin for the base rate term loan and the base rate revolving loans is 1.50%. U.S. dollar denominated borrowings bear interest at the applicable margin plus either a base rate or, at our option, a LIBOR rate. The applicable margin for the Eurodollar term loan, Euro-denominated term loan and Eurodollar revolving loans is 2.50%. Euro-denominated borrowings under the senior credit facility bear interest at the applicable margin plus a EURIBOR rate. The term loan facilities require regularly scheduled quarterly payments of principal and interest, and the entire amount of the term loan facilities will mature on August 9, 2014. The full amount borrowed under the revolving credit line will mature on August 9, 2013. In the event we fail to refinance our 7³/4% senior subordinated notes by February 15, 2013, then the maturity date of our term loan facilities and revolving credit line will be accelerated to February 15, 2013.

On May 4, 2009, we entered into an Amendment, Waiver, Resignation and Appointment Agreement, or the amendment, with Lehman Commercial Paper Inc., Bank of America, N.A., and certain of the other parties to the senior credit facility. Pursuant to the amendment, Lehman Commercial Paper has resigned as administrative agent and Bank of America has been appointed as successor administrative agent under the senior credit facility. The amendment also provides for other modifications of the senior credit facility including the termination of Lehman Commercial Paper’s commitments under our undrawn revolving credit lines of $28.2 million and provides for Bank of America to extend commitments under our undrawn revolving credit lines of $10.0 million. This modification reduces our revolving credit lines from $62.0 million to $43.8 million.

As of June 30, 2009, we had an aggregate face amount of $336.7 million of outstanding indebtedness under our senior credit facility representing $212.1 million in U.S. dollar denominated term loans, $124.6 million in Euro-denominated term loans, $29.6 million available under the revolving credit facility and $14.2 million available under the Euro-denominated revolving credit line. As of June 30, 2009, the applicable interest rate was 2.81% on the term loan based on the LIBOR option and 3.28% on the Euro-denominated delayed term loan based on the EURIBOR option.

The senior credit facility contains covenants that will limit our ability and that of our Guarantors to, among other things, incur or guarantee additional indebtedness, create liens, pay dividends on or repurchase stock, make certain types of investments, restrict dividends or other payments from our subsidiaries, enter into transactions with affiliates and sell assets or merge with other companies. The senior credit facility also requires compliance with financial covenants, including a maximum ratio of total indebtedness to Consolidated EBITDA. As of June 30, 2009, we believe we are in compliance with all of our covenants contained in the senior credit facility.

7³/4% Senior Subordinated Notes Due 2013

On August 24, 2005, we completed a private offering of $175.0 million in aggregate principal amount of our 7³/4% senior subordinated notes due 2013. Interest on the notes accrues at the rate of 7³/4% per annum and is payable semi-annually in arrears on February 15 and August 15, commencing on February 15, 2006.

The indenture governing our 7³/4% senior subordinated notes due 2013 contains certain covenants that among other things, limit our ability to incur additional indebtedness and issue preferred stock, pay dividends, make other restricted payments and investments, create liens, incur restrictions on the ability of our subsidiaries to pay dividends or other payments to them, sell assets, merge or consolidate with other entities, and enter into transactions with affiliates. As of June 30, 2009, we believe we are in compliance with all of the covenants contained in the indenture governing our senior subordinated notes.

Effect of Inflation

Inflation generally affects us by increasing our cost of labor, equipment and new materials. We do not believe that inflation has had any material effect on our results of operations during the three and six months ended June 30, 2009 and 2008.

Critical Accounting Policies and Estimates

In applying the accounting policies that we use to prepare our consolidated financial statements, we necessarily make accounting estimates that affect our reported amounts of assets, liabilities, revenues, and expenses. Some of these accounting estimates require us to make assumptions about matters that are highly uncertain at the time we make the accounting estimates. We base these assumptions and the resulting estimates on historical information and other factors that we believe to be reasonable under the circumstances, and we evaluate these assumptions and estimates on an ongoing basis; however, in many instances we reasonably could have used different accounting estimates, and in other instances changes in our accounting estimates are reasonably likely to occur from period to period, with the result in each case being a material change in the financial statement presentation of our financial condition or results of operations. We refer to accounting estimates of this type as “critical accounting estimates.”

Accounting estimates necessarily require subjective determinations about future events and conditions. During the six months ended June 30, 2009, we have not adopted any new critical accounting policies, have not changed any critical accounting policies and have not changed the application of any critical accounting policies from the year ended December 31, 2008. You should read the Critical Accounting Estimates in Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations, Item 1A – Risk Factors included in our Annual Report on Form 10-K for the year ended December 31, 2008 and our summary of significant accounting policies in Note 2 of our Notes to Condensed Unaudited Consolidated Financial Statements in this Form 10-Q.

Recent Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in Consolidated Financial Statements, an Amendment of Accounting Research Bulletin No 51 (SFAS 160). SFAS 160 establishes accounting and reporting standards for ownership interests in subsidiaries held by parties other than the parent, changes in a parent’s ownership of a noncontrolling interest, calculation and disclosure of the consolidated net income attributable to the parent and the noncontrolling interest, changes in a parent’s ownership interest while the parent retains its controlling financial interest and fair value measurement of any retained noncontrolling equity investment. SFAS 160 is effective for financial statements issued for fiscal years beginning after December 15, 2008, and interim periods within those fiscal years. We adopted SFAS 160 on January 1, 2009. The adoption of SFAS 160 did not have a material impact on our financial position and results of operations.

In December 2007, the FASB issued Statement of Financial Accounting Standards No. 141 (revised 2007), Business Combinations (SFAS 141R). SFAS 141R provides revised guidance on how acquirers recognize and measure the consideration transferred, identifiable assets acquired, liabilities assumed, noncontrolling interests, and goodwill acquired in a business combination. SFAS 141R also expands required disclosures surrounding the nature and financial effects of business combinations. SFAS 141R is effective, on a prospective basis, for fiscal years beginning after December 15, 2008. We adopted SFAS 141R on January 1, 2009. The adoption of SFAS 141R did not have a significant impact on our consolidated financial statements, and the impact that its adoption will have on our consolidated financial statements in future periods will depend on the nature and size of business combinations completed subsequent to the date of adoption.

In May 2009, the FASB issued Statement of Financial Accounting Standards No. 165, Subsequent Events (SFAS 165), which provides guidance to establish general standards of accounting for, and disclosures of, events that occur after the balance sheet date but before financial statements are issued or are available to be issued. SFAS 165 is effective for interim or fiscal periods ending after June 15, 2009. We adopted SFAS 165 on June 30, 2009. Adoption of SFAS 165 did not have a material impact on our financial position and results of operations.

Recently Issued Accounting Pronouncements

In June 2009, the FASB issued SFAS 167, Amendments to FASB Interpretation No. 46(R) (“SFAS 167”). SFAS 167 eliminates FASB Interpretation 46(R)’s exceptions to consolidating qualifying special-purpose entities, contains new criteria for determining the primary beneficiary, and increases the frequency of required reassessments to determine whether a company is the primary beneficiary of a variable interest entity. SFAS 167 also contains a new requirement that any term, transaction, or arrangement that does not have a substantive effect on an entity’s status as a variable interest entity, a company’s power over a variable interest entity, or a company’s obligation to absorb losses or its right to receive benefits of an entity must be disregarded in applying FASB Interpretation 46(R)’s provisions. The elimination of the qualifying special-purpose entity concept and its consolidation exceptions means more entities will be subject to consolidation assessments and reassessments. SFAS 167 is effective as of the beginning of an enterprise’s first fiscal year beginning after November 15, 2009, and for interim periods within that first period, with earlier adoption prohibited. We are currently assessing the potential impacts, if any, on its consolidated financial statements.

Off-Balance Sheet Arrangements

We provide financial settlement services to wireless operators to support the payment of roaming related charges to their roaming network partners. In accordance with our contract with the customer, funds are held by us as an agent on behalf of our customers to settle their roaming related charges to other operators. These funds and the corresponding liability are not reflected in our consolidated balance sheet. The off-balance sheet amounts totaled approximately $131.6 million and $101.3 million as of June 30, 2009 and December 31, 2008, respectively.

We have also used off-balance sheet financing in recent years primarily in the form of operating leases for facility space and some equipment leasing and we expect to continue these practices. We do not use any other type of joint venture or special purpose entities that would create off-balance sheet financing. We believe that our decision to lease our office space is similar to that used by many other companies of our size and does not have a material impact to our financial statements.

Available Information

We file annual and quarterly reports, proxy statements and other information with the SEC. You may read and print materials that we have filed with the SEC from its website at www.sec.gov. In addition, certain of our SEC filings, including our annual report on Form 10-K, our quarterly reports on Form 10-Q, our current reports on Form 8-K, and amendments to those reports filed or furnished pursuant to Section 13 or 15(d) of the Exchange Act can be viewed and printed from the investor information section of our website at www.syniverse.com, free of charge, as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC. Certain materials relating to our corporate governance, including our senior financial officers’ code of ethics, are also available in the investor information section of our website. Our website and the information contained or incorporated therein are not intended to be incorporated into this report.

Copies of our filings, specified exhibits and corporate governance materials are also available, free of charge, by writing to us using the address on the cover of this Form 10-Q. You may also telephone our investor relations office directly at (813) 637-5007.

Our SEC filings may also be viewed and copied at the following SEC Public Reference Room and at the offices of the New York Stock Exchange where our common stock is quoted under the symbol “SVR.”

SEC Public Reference Room

100 F Street, N.E.

Washington, DC 20549

(You may call the SEC at 1-800-SEC-0330 for further information on the public reference room.)

NYSE Euronext

20 Broad Street

New York, NY 10005

ITEM 3:

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Interest Rate Market Risk

We are exposed to changes in interest rates on our senior credit facility. Our senior credit facility is variable rate debt. Interest rate changes therefore generally do not affect the market value of such debt but do impact the amount of our interest payments and, therefore, our future earnings and cash flows, assuming other factors are held constant. As of June 30, ~~2004~~2009 and December 31, 2008, we had ~~variable rate debt of approximately~~ $~~196~~336.27 million (and $~~190~~338.28 million, ~~net~~respectively, of ~~discount)~~variable rate debt outstanding on our senior credit facility. Holding other variables constant, including levels of indebtedness, a one percentage point increase in interest rates on our variable debt would have had an estimated impact on pre-tax earnings and cash flows for the next year of approximately $23.04 million. Under the terms of the senior credit facility, at least 4525% of our funded debt must bear interest that is effectively fixed. As a result, we may from time to time be required to enter into interest rate protection agreements establishing a fixed maximum interest rate with respect to a portion of our total indebtedness.

~~In March~~On ~~2003~~October 6, 2008, we entered into an ~~interest rate protection~~ agreement ~~that~~to ~~effectively~~hedge ~~caps~~$100.0 ~~the~~million ~~LIBOR~~of ~~exposure~~our ofU.S. ~~$100~~dollar-denominated ~~million~~term loan ofunder our senior credit facility. atThe ~~3.0%~~hedge ~~for~~effectively aswaps ~~period~~variable ofrate ~~two~~interest ~~years.~~based Ason 1-month LIBOR to a ~~result~~fixed ofrate ~~this~~interest thereby reducing our exposure to interest rate ~~protection~~fluctuations. The ~~agreement, approximately~~effective ~~79%~~date of ~~funded~~the ~~debt~~swap ~~now~~is October 31, ~~bears~~2008 ~~interest~~and ~~that~~the maturity date is ~~effectively~~October 31, 2010. The fixed asrate tois 5.26% based on our 2.76% swap rate plus our 2.50% applicable margin.

Foreign Currency Market Risk

WeAlthough the majority of our operations are ~~exposed~~conducted toin U.S. dollars, our significant foreign ~~currency~~operations ~~risk~~are conducted in ~~certain~~Euros ~~circumstances~~and Great Britain Pounds. ~~Prior~~Our exposure to these currencies is the result of our ~~opening~~acquisition of ~~the~~BSG ~~office~~Wireless in ~~the~~December ~~Netherlands~~2007. inOn ~~February~~a ~~2003~~less ~~and~~significant basis, we conduct operations in the ~~acquisition~~various currencies of the ~~Syniverse~~Asia-Pacific ~~Holdings~~region, inCanada ~~late~~and ~~December~~Latin ~~2003~~America, weseveral ~~conducted~~of ~~all~~which ofare ~~our~~directly ~~business~~tied to the movement in the U.S. ~~dollars~~dollar. ~~These~~Consequently, ~~two~~a ~~items~~portion ~~had~~of anour ~~immaterial~~revenues ~~impact~~and onexpenses ~~our~~may ~~financial~~be ~~position~~affected ~~and~~by ~~results~~fluctuations ofin ~~operations~~foreign ~~for~~currency ~~the~~exchange ~~six~~rates. ~~months~~We ~~ended~~are also ~~June~~affected ~~30,~~by ~~2004,~~fluctuations ~~however,~~in ~~this~~exchange ~~could~~rates ~~change~~on inassets ~~future~~and ~~periods.~~liabilities Atrelated ~~this~~to ~~time,~~our weforeign operations. We have not ~~entered~~hedged ~~into~~our ~~any~~translation ~~arrangements to~~risk ~~hedge~~on ~~our~~foreign ~~risks~~currency ~~from~~exposure ~~foreign~~through ~~currency~~the use of derivative instruments.

InA ~~addition,~~10% ~~some~~change ~~of our~~in ~~customers~~average ~~are~~foreign ~~based~~currency ~~outside~~rates ofagainst the ~~United States~~U.S. Indollar during the six months ended June 30, ~~2004,~~2009 ~~certain~~compared ~~countries (primarily Venezuela) experienced instability causing these customers~~ to ~~have~~the ~~difficulty~~average ~~in exchanging their local currencies for U.S.~~foreign ~~dollars~~currency toexchange ~~satisfy~~rates ~~their~~during ~~invoices~~the ~~due~~three tomonths ~~us.~~would Ashave aincreased ~~result,~~or wedecreased ~~may~~our berevenues ~~required~~and tonet ~~explore~~income ~~other~~by ~~techniques~~approximately to$3.0 ~~protect~~million ~~against~~and ~~such~~$1.8 ~~issues~~million, ~~in the future~~respectively.

ITEM 4:

CONTROLS AND PROCEDURES

AsEvaluation of ~~the~~Disclosure ~~end~~Controls of the period covered by this report, an evaluation was carried out under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in rule 13a-15(e) under the Securities an Exchange Act of 1934) as required by Rule 13a-15(b). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the design and operation of these disclosure controls and procedures were effective.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure. In connection with the preparation of this quarterly report on Form 10-Q, an evaluation was performed under the supervision and with the participation of our management, including the CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act) as of June 30, 2009. Based on this evaluation, our management, including our CEO and CFO, concluded that our disclosure controls and procedures were effective as of June 30, 2009.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

PART II

OTHER INFORMATION

ITEM 1:

LEGAL PROCEEDINGS

We are currently a party to various claims and legal actions that arise in the ordinary course of business. We believe such claims and legal actions, individually and in the aggregate, will not have a material adverse effect on our business, financial condition, or results of operations. ~~As of June 30, 2004, we have considered all of the claims and disputes of which we are aware and accrued amounts in our analysis of doubtful accounts, allowances for credit memos~~ or ~~probable~~cash ~~loss accruals~~flows.

~~The~~ITEM ~~most~~1A: ~~significant~~RISK ~~of these claims, in terms of dollars sought, is described below.~~ FACTORS

~~SBC~~Our ~~Communications~~business, ~~Inc.,~~financial ~~d/b/a~~condition, ~~SBC~~operating ~~Ameritech,~~results ~~SBC Southwestern Bell~~ and ~~SBC~~cash ~~Pacific~~flows ~~Bell~~can ~~(collectively,~~be ~~SBC),~~impacted ~~have~~by ~~asserted~~a ~~claims~~number ~~against us in the total principal sum~~ of ~~$7.3 million~~factors, ~~based~~any onone ~~alleged~~of ~~overcharging~~which ~~for~~could ~~QRS~~cause ~~and~~our ~~CNAM~~actual ~~hubbing~~results ~~and transport services we provided. SBC also has refused~~ to ~~pay~~vary usmaterially anfrom ~~additional~~recent ~~$1.9~~results ~~million~~or ~~related~~from toour ~~these~~anticipated ~~same~~future ~~services~~results. WeFor ~~deny~~a ~~the~~discussion ~~claims~~identifying ~~and~~additional ~~believe they are unfounded and intend to vigorously defend ourselves. On April 15, 2003, we filed suit against SBC Southwestern Bell and SBC~~risk ~~Pacific~~factors ~~Bell in Hillsborough County Circuit Court seeking monetary damages~~ and aimportant ~~determination~~factors that ~~SBC~~could iscause ~~not~~actual ~~entitled~~results to ~~any~~differ ~~sum~~materially itfrom ~~claims~~those itanticipated, issee ~~owed.~~the ~~Our~~discussion ~~lawsuit~~in ~~was~~“Item ~~removed~~1A to– ~~Federal~~Risk ~~Court~~Factors” byand ~~SBC~~“Management’s onDiscussion ~~the~~and ~~grounds~~Analysis of ~~diversity~~Financial ~~jurisdiction.~~Condition Weand ~~disputed~~Results ~~the~~of ~~grounds~~Operations” ~~for removal~~ and ~~moved~~“Notes to ~~remand~~Consolidated ~~the~~Financial ~~action~~Statements” toin ~~state court. The Federal Court granted~~ our ~~motion~~Annual toReport ~~remand~~on ~~and~~Form ~~the~~10-K ~~action~~for ~~is now pending in state court in Florida. SBC Pacific Bell also filed a motion to dismiss~~ the ~~Florida action~~year onended ~~the grounds of a lack of jurisdiction~~December 31, ~~while~~2008 ~~SBC Southwestern Bell filed a motion to abate~~ and~~/or~~ ~~transfer~~disclosed ~~the~~elsewhere ~~Florida action based on a lawsuit SBC Southwestern Bell filed against us~~ in ~~Texas~~this ~~state~~quarterly ~~court~~report on ~~October~~Form ~~6, 2003 seeking approximately $2~~10-Q.0 ~~million.~~There Wehas ~~retained~~been ~~Texas~~no material ~~counsel~~changes ~~to seek a stay of the Texas proceedings pending disposition of the matter~~ in ~~Florida. On April 20, 2004, the Texas Court granted~~ our ~~request~~risk ~~and~~factors ~~abated~~from ~~the~~those ~~Texas~~disclosed ~~action. SBC Pacific Bell withdrew its motion to dismiss the Florida action. Both SBC Southwestern Bell and SBC Pacific Bell have filed an answer and counterclaim~~ in ~~the~~our ~~Florida~~Annual ~~action.~~Report Onon ~~June~~Form ~~28,~~10-K ~~2004, SBC Ameritech filed a Demand~~ for ~~Arbitration in Chicago seeking $2.1 million it claims it was over billed by Syniverse. We filed a motion to dismiss/abate~~ the ~~Demand~~year ~~based~~ended ~~on SBC Ameritech’s failure to engage in mediation prior to Arbitration~~December 31, ~~as required by the contract under which it alleges it was over billed~~2008.

ITEM 2: ~~CHANGES~~UNREGISTERED INSALES ~~SECURITIES, USE~~ OF ~~PROCEEDS~~EQUITY SECURITIES AND ~~ISSUER~~USE ~~PURCHASES~~ OF ~~EQUITY SECURITIES~~ PROCEEDS

(a) ~~None~~On May 15, 2009, in conjunction with our acquisition of all the assets of Wireless Solutions International, we issued 200,000 shares of common stock as a portion of consideration for the transaction. The common stock was issued to the sole shareholder of Wireless Solutions International and five individuals. These five individuals, along with the sole shareholder of Wireless Solutions International, became employees of Syniverse, Inc. on the closing date of the acquisition. The shares were placed in escrow and will be disbursed in 32 months from the closing date if certain employment conditions are met. The shares were not registered under the Securities Act of 1933, as amended (the Act), in reliance on Section 4(2) of the Act as the shares were issued only to the six individuals and did not involve a public offering.

(b)

None.

(c)

None.

(d) None

(e) None

ITEM 3:

DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4:

SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

~~None~~Our Annual Meeting of Shareholders was held on May 8, 2009. The shareholders voted on the following matters:


Proposal I.		Election of 8 directors (Jason Few, Robert J. Gerrard, Jr., Tony G. Holcombe, James B. Lipham, Robert J. Marino, Fritz E. von Mering, Jack Pearlstein and Timothy A. Samples).

Proposal II.		Ratify and approve the selection of Ernst & Young LLP as the Independent registered public accounting firm for Syniverse Holdings, Inc. for 2009.

Proposal III.		Approve the Syniverse Holdings, Inc. Amended and Restated 2006 Long-Term Equity Incentive

The results of the voting were as follows:


Proposal	Affirmative Votes	Withheld Votes	Abstentions/Broker Non-Votes
I (Few)	27,872,110	36,079,436	—
I (Gerrard, Jr.)	27,871,654	36,079,892	—
I (Holcombe)	28,090,197	35,861,349	—
I (Lipham)	27,870,157	36,081,389	—
I (Marino)	28,086,776	35,864,770	—
I (Mering)	28,089,513	35,862,033	—
I (Pearlstein)	28,089,970	35,861,576	—
I (Samples)	27,871,137	36,080,409	—

II	63,732,680	205,152	13,689

III	50,819,754	10,731,909	25,318

All proposals received the required affirmative votes and were adopted by the shareholders.

ITEM 5:

OTHER INFORMATION

~~None.~~(a) Not applicable.

31(b) Not applicable.

ITEM 6:

EXHIBITS


Exhibit No.		Description
3.1		Restated Certificate of Incorporation of TSI Telecommunication Services Inc. (n/k/a Syniverse Technologies, Inc.) (1)

3.1.1		Certificate of Amendment of Restated Certificate of Incorporation of Syniverse Technologies, Inc. (2)

3.1.2		Second Amended and Restated Certificate of Incorporation of Syniverse Holdings, Inc. (3)

3.2		Bylaws of Syniverse Technologies, Inc. (1)

3.2.1		Amended and Restated Bylaws of Syniverse Holdings, Inc. (3)

10.1		Amendment, Waiver, Resignation and Appointment Agreement, dated as of May 4, 2009 by and among Syniverse Holdings, Inc., Syniverse Technologies, Inc., the other financial institutions party thereto, Lehman Commercial Paper Inc. and Bank of America, N.A. (4)

10.2		Syniverse Holdings, Inc. Amended and Restated 2006 Long-Term Equity Incentive Plan. (5)

*10.3		Form of Amended and Restated 2006 Long-Term Equity Incentive Plan Restricted Stock Grant Agreement for Non-Employee Directors.

*10.4		Form of Amended and Restated 2006 Long-Term Equity Incentive Plan Non-Qualified Stock Option Award Agreement for Non-Employee Directors.

*31.1		Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.

*31.2		Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.

**32.1		Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.

**32.2		Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.

(1)	Incorporated by reference to the Registrants’ Registration Statement on Form S-4 (Registration No. 333-88168).

(2)	Incorporated by reference to Syniverse Holdings, LLC and Syniverse Technologies, Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 2003.

(3)	Incorporated by reference to Syniverse Holdings, Inc.’s Registration Statement on Form S-1/A (Registration No. 333-120444).

(4)	Incorporated by reference to the Current Report on Form 8-K of Syniverse Holdings, Inc. and Syniverse Technologies, Inc. Current Report filed May 8, 2009.

(5)	Incorporated by reference to the Current Report on Form 8-K of Syniverse Holdings, Inc and Syniverse Technologies, Inc. Current Report filed May 12, 2009.

*	Filed herewith

**	Furnished herewith

ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS REQUIRED TO BE FILED BY ITEM 601 OF REGULATION S-K

Exhibit No.		Description
* 31.1		Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
* 31.2		Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.
* 32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) by the Chief Executive Officer.
* 32.2		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) by the Chief Financial Officer.

* Filed herewith.

(b) REPORTS ON FORM 8-K

The registrant filed the following reports on Form 8-K during the second quarter of 2004:

* The registrant filed a Current Report on Form 8-K on May 10, 2004, under “Item 12. Disclosure of Results of Operations and Financial Condition” reporting on Syniverse Technologies Inc.’s results for the quarter ending March 31, 2004.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SYNIVERSE HOLDINGS, LLC
		SYNIVERSE HOLDINGS, INC.
	~~(Registrant)~~	(Registrant)
Date: August 12, 2004	/s/ Raymond L. Lawless
Date: August 7, 2009		/s/ David W. Hitchcock
	Raymond L. Lawless
		David W. Hitchcock
	Chief Financial Officer and Secretary
		Chief Financial Officer
	(Authorized Officer and Principal Accounting Officer)
		(Principal Financial Officer)
	~~SYNIVERSE TECHNOLOGIES, INC.~~	SYNIVERSE TECHNOLOGIES, INC.
	~~(Registrant)~~	(Registrant)
	/s/ Raymond L. Lawless
		/s/ Martin A. Picciano
	Raymond L. Lawless
		Martin A. Picciano
	Chief Financial Officer and Secretary
		Senior Vice President and Chief Accounting Officer
	(Authorized Officer and Principal Accounting Officer)
		(Principal Accounting Officer)

3339

~~EXHIBITS~~INDEX ~~REQUIRED TO BE FILED BY ITEM 601~~ OF ~~REGULATION~~EXHIBITS ~~S-K~~

Exhibit No.		Description
* 31.1		Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
*10.3		Form of Amended and Restated 2006 Long-Term Equity Incentive Plan Restricted Stock Grant Agreement for Non-Employee Directors.
* 31.2		Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.
*10.4		Form of Amended and Restated 2006 Long-Term Equity Incentive Plan Non-Qualified Stock Option Award Agreement for Non-Employee Directors.
* 32.1		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) by the Chief Executive Officer.
*31.1		Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
* 32.2		Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. 1350) by the Chief Financial Officer.
*31.2		Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.
**32.1		Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Executive Officer.
**32.2		Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 by the Chief Financial Officer.

* Filed herewith.

~~E-1~~** Furnished herewith

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